
THIRUVANANTHAPURAM: The Kerala government’s hopes of a substantial allocation to compensate its revenue loss and to fund key initiatives were dashed with the budget ignoring most of its demands.
The major demands in the pre-budget wish list submitted by the state included a special economic package worth Rs 24,000 crore, a Rs 2,000-crore package for Wayanad rehabilitation and Rs 4,500 crore assistance for climate activities.
Terming the budget a big disappointment, state finance minister KN Balagopal said it failed to treat all states fairly. “The special economic package and Wayanad rehabilitation package were just demands, and we had high hopes for them. The Union finance minister says the budget’s focus is on investment, development and export. But it is silent on the Vizhinjam port project, a major infrastructure project of recent times,” he said.
He said the budget has kept aside Rs 25 lakh crore for states.
“Last year, Kerala received only Rs 32,000 crore even though we were entitled to Rs 73,000 crore if the population was a criterion,” he said.
“This year, the allocation for states increased by Rs 4 lakh crore. Kerala’s share from the additional allocation will be in the Rs 3,000 crore-Rs 4,000 crore range,” he added.
In 2025-26, the estimated devolution of Union taxes and duties to Kerala is Rs 27,382.06 crore as against Rs 24,772.38 crore in 2024-25. Kerala’s receipts from the Centre, including devolution and grants in 2024-25 was Rs 33,954 crore. This may increase to about Rs 37,000 crore, according to the preliminary estimates by the government.
Though state-specific demands were ignored, Kerala will be a major beneficiary of some announcements, including tax reliefs. The state has a significant number of I-T payees. The total I-T collection, including personal I-T, from the state rose from about Rs 15,000 crore in 2019-20 to 23,967 crore in 2023-24.