Kerala Budget: State has overcome fiscal strain, economy ready for 'take-off,' says Finance Minister

As part of rebuilding landslide-hit Wayanad, Rs. 750 crore has been announced in the budget. This amount will be used for the first phase of reconstruction initiatives.

Finance minister KN Balagopal presenting State Budget in Assembly on Friday. Photo | BP Deepu, EPS

THIRUVANANTHAPURAM: Kerala has tided over the most difficult phase of fiscal strain, and its economy is poised for a 'take-off' in the coming years, Finance Minister K. N. Balagopal has said while presenting the Kerala Budget for the 2025-26 fiscal in the State Legislative Assembly on Friday.

The Finance Minister began his budget with announcements for government employees and pensioners.

Balagopal said that service pension arrears will be distributed in February. Two instalments of pay revision for government employees will be disbursed during this fiscal, and the two-year lock-in period for Dearness Allowance (DA) arrears will be removed, he added.

As part of rebuilding landslide-hit Wayanad, Rs. 750 crore has been announced in the budget. This amount will be used for the first phase of reconstruction initiatives. Balagopal lamented the lack of support from the Centre for Wayanad's rehabilitation.

An urban policy will be implemented this year, and metropolitan planning committees will be set up for Thiruvananthapuram, Kochi, and Kozhikode.

The Finance Minister announced that preliminary work for the Thiruvananthapuram metro rail will begin in 2025.

Balagopal also said that 50 research projects will be sanctioned for higher education institutions to promote research and development.

Other major announcements:

1. Rs 1160 crore allocated for housing projects under the LIFE Mission for 2025-26.

2. Rs 700 crore allocated for the Karunya Arogya Suraksha Padhathi (KASP) insurance scheme, which covers nearly 42 lakh families.

3. The Vizhinjam-Kollam-Punalur development growth triangle project has been announced. Vizhinjam Port will be connected to production units, assembly units, and railway lines.

4. The K Homes project has been announced to make use of the large number of unoccupied homes for tourism purposes. Rs five crore has been allocated for the project, which will come up within a 10 km radius of tourist destinations.

5. A new IT park will be established in Kollam, and a centre for Artificial Intelligence (AI) will be set up in Thiruvananthapuram.

6. The Hydrogen Valley project will begin this year with an allocation of Rs five crore, while Rs 10 crore will be allocated for bio-ethanol research and production.

7. MT Study Centre to be established near Thunchan Parambu in Tirur in memory of writer MT Vasudevan Nair, who passed away recently. A sum of Rs 5 crore has been allocated for the project.

8. Rs 50 crore additional allocation for the proposed special package to mitigate human-wildlife conflicts.

9. Rs 50 crore for the Institute of Advanced Virology in Thiruvananthapuram.

10. Rs 100 crore to replace ageing government vehicles, and Rs 107 crore to KSRTC for purchasing BS-VI diesel buses.

11. Chief Minister’s Researchers Scholarship announced. Regular, full-time researchers will be provided a monthly fellowship of Rs 10,000 under the scheme.

12. Rs 401 crore earmarked for the mid-day meal scheme in schools; Rs 150.34 crore for the free uniform scheme.

1. What has gone up:

   1. Land tax hiked by 50% to mobilise Rs 100 crore.

   2. Court fees hiked to mobilise Rs 150 crore.

   3. Tax for electric vehicles and contract carriage vehicles hiked.

   4. 50% hike in tax for two-wheelers and three-wheelers aged 15 years and above.

   What has gone down:

   1. Tax for stage carriage vehicles reduced by 10%.