It is beyond doubt that state budgets have become very influential in the emergence and functioning of modern states and societies worldwide. In this paper we go beyond the narrow technical and objective roles of state budgets, into how state budgets with provision for affirmative action have become a tool for racial differentiation. We argue that budgetary allocations for affirmative action not only create a pattern of visibility and power which in turn shape racial discourse, but future budgets also get shaped by such conditions. Abstract It is beyond doubt that state budgets have become very influential in the emergence and functioning of modern states and societies worldwide. In this paper we go beyond the narrow technical and objective roles of state budgets, into how state budgets with provision for affirmative action have become a tool for racial differentiation. We argue that budgetary allocations for affirmative action not only create a pattern of visibility and power which in turn shape racial discourse, but future budgets also get shaped by such conditions.