Takeaways from Kerala Budget 2025

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The budget speech was held on 7th February by the Financial Minister of Kerala K N Balagopal in the Kerala Legislative Assembly. The Economic Review report was presented in the Assembly on February 7, 2023. This is Mr Balagopal’s fifth Budget after taking over as Kerala’s Finance Minister.

Budget


Major Announcements from the Budget Speech 

  1. GSDP rate- 2024-25 - 11.77% 
  2. GSDP-₹13,11,437 crore
  3. Public Debt- ₹40,848.21 crore
  4. Revenue Deficit- 2.1%
  5. ₹750 Crore for Wayanad Relief Package
  6. Expected  growth rate
  7. Local Self-Government- ₹15,980.41 crore 
  8. LSG General Purpose- ₹2,577 crore
  9. Kerala Climate Resilient Agri Value Chain Modernisation Project: ₹2,365 crore
  10. Removal of river sand from the Bharatapuzha, Chaliyar, and Kadalundi rivers will be resumed
  11. Six-lane highway construction to be completed by December 31, 2025
  12. Pilgrimage tourism in Kozhenchery- ₹3 crore
  13. Sabarimala Master Plan- ₹1033.62crore
  14. KSEB- ₹1088 crore
  15. A portal named KLICK (Kerala Land Bank for Industrial Corridor Development) will be launched.
Major Takeaways 
  • Special Package for Wayanad
  • ₹600 Crore for Service Pension revision arrears
  • KSRTC- ₹178.94 crore
  • K-Homes for improving tourist infrastructure
  • The pilot project for that will be done in Fort Kochi, Kumarakom and Kovalam.
  • Kerala House in Hyderabad 
  • Seaplane tourism
  • The Vizhinjam Seaport Project will be completed by December 2028
  • LIFE Mission- ₹1160 crore
  • Kochi, Kozhikode, Thiruvananthapuram will have a metropolitan plan

To be Costly

  • Land Tax
  • EV Tax 
  • Court Fees
  • Tax on Tourist Buses
  • Gallonage fees
  • 50% tax increase in taxes for motorcycles and three-wheelers above 15 years. 
  • State government employees to get a 2% reduction in home loan interest

Transportation Infrastructure 

  • Roadways 
    • Roads and Bridges- ₹3061 crore
    • 150 bridges to be connected 
  • Waterways 
    • ₹500 crore for Inland Waterways.
  • Airways 
    • ₹15 crore for charted flight services
    • Expansion of NORKA ambulance services
    • Special purpose vehicle for developing airstrips under KIIFB
  • Metro
    • Trivandrum Metro work to start in 2025-26 
    • Kozhikode Metro work to start soon
    • Kochi Metro extension work to begin

Startups and Industry

  1. New cooperatives to attract a lower tax rate of 15 per cent.
  2. Agriculture-based rural startup support. 
  3. 100 joint commissioners for disposal of small appeals. 
  4. ₹1cr for Fisheries Innovation Council under KDISC
  5. ₹125 crore- Kerala Startup Mission
  6. Bangalore-Kochi Industrial Corridor- ₹200 crore
  7. Dairy Village in Dharmadom- ₹133 crore
Education 
  1. ₹109 crore was allocated for the free school uniform scheme
  2. ₹2 cr for installing napkin incinerators in public schools.
  3. ₹3cr for Haritha Kerala Mission's menstrual cup scheme for higher secondary students and Kudumbashree workers
  4. Kerala Chalachitra Academy- ₹14 crore
  5. ₹20 crore was allocated for researchers without fellowships. Each researcher will receive ₹10,000 per month
  6. Mid-day meal programme- ₹402 crore
  7. KAU- ₹47 crore
IT 
  1. IT park in Kannur and Kollam- ₹293.22 crore.
  2. ‘Expand Your Office’ scheme to support small-scale IT entrepreneurs by providing loans at 5% interest.
  3. WiFi Hotspots- ₹15 crore
  4. Funds for Cyberpark, Infopark and Technopark
  5. IT- ₹507 crore.
  6. Digital Science Park- ₹212 crore
Criticisms 
Principal opposition party Congress criticised the hike forms of taxes which will be a massive public burden. The critics point out the mounting debt. The budget revenue of ₹1,52,352 crore and an expenditure of ₹1,79,476 crore, with a deficit- of ₹27,125 crore. BJP has highlighted that the budget fails in holding forth a coherent plan to mitigate Kerala’s crippling fiscal crisis. 

Analysis 
We can see that there is a massive push for infrastructure, development, transportation etc. Also enough push for the education, environment and tourism sectors. The state is still under the grip of cash crunch and borrowings. This is an important push for the modernisation of education, infrastructure and transportation in recent years deviating from the traditional Marxist-Socialist principles. The most controversial K-Rail didn't secure any mention likely that it has temporarily stalled. An increase in taxes is pretty inflationary. A large section of the population will face the brunt of it. Ahead of the elections, this year, it may be backfire. Social welfare may have taken a back seat, unlike other typical LDF budgets. As mentioned before, it was a deviation from classical communism.  

Credits- The Hindu, Manorama Online

Check full speech here- 

https://www.onmanorama.com/news/kerala/2025/02/07/kerala-budget-kn-balagopal-welfare-pension-highlights-live.html

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