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Kerala Finance Minister K.N. Balagopal presented the Kerala Budget 2025-26 in the State Legislative Assembly on February 7, outlining ambitious infrastructure projects, social welfare initiatives, and economic recovery strategies. The budget places significant emphasis on metro rail expansion, a high-speed rail corridor, and the development of an IT park in Kannur while addressing financial resilience and pending payments.
Key Highlights of Kerala Budget 2025:
Wayanad Rehabilitation – The state government has allocated Rs 750 crore for the rehabilitation of Wayanad disaster victims, ensuring timely completion of the project.
Economic Resilience – Kerala has demonstrated financial stability with a 70% increase in its own tax collection over the last four years, reinforcing its ability to fund developmental projects.
K-Homes Project for Tourism- The new K-Homes initiative seeks to convert unoccupied houses into tourism accommodations. The pilot phase will focus on major tourist hubs like Fort Kochi, Kumarakom, Kovalam, and Munnar within a 10-kilometer radius.
Metro Rail Expansion- The government has prioritized metro rail projects in Kochi, Kozhikode, and Thiruvananthapuram. The Kochi Metro will be extended, while metro projects in Kozhikode and Thiruvananthapuram are set to commence soon. Work on the Thiruvananthapuram Metro will begin this year.
Social Welfare Initiatives
- Rs 3,820 crore has been allocated for scholarships for minority and Scheduled Castes/Tribes students.
- The state will provide Rs 200 crore under the ‘Marg Deepam’ project to cover minority students’ scholarships from classes 1 to 8 after the Centre’s withdrawal.
- Welfare pensions will amount to Rs 50,000 crore.
Infrastructure Development
- Construction of 150 bridges across Kerala is expected to be completed soon.
- Rs 600 crore has been allocated for the final installment of service pension revision arrears.
- Two pending salary revision arrears installments will be merged into the Provident Fund.
- Two pending Dearness Allowance (DA) installments will be cleared this year.
- The lock-in period for DA arrears has been removed.
Kerala Infrastructure Investment Fund Board (KIIFB)
- Rs 500 crore has been earmarked for large-scale projects.
- Revenue-generating mechanisms will be introduced to manage KIIFB’s existing debt of Rs 87,000 crore.
- The state has urged the Centre to reconsider its stance on KIIFB’s financial constraints.
Other Major Announcements:
- IT Park in Kannur to boost employment opportunities.
- Rs 700 crore for the Karunya Health Scheme and Rs 11,431.73 crore for the health sector.
- LIFE Project: One lakh houses will be completed with Rs 1,160 crore allocated.
- New shipbuilding yard planned for Southern Kerala.
- Global Kerala Centre with a Rs 5 crore investment.
- High-Speed Rail Corridor (Silver Line Project): Aims to cut travel time from Thiruvananthapuram to Kasaragod to under four hours.
- Statewide cyberbullying and fake news control project initiated by the police and public relations department.
- Rs 10 crore allocated for research on cost-effective bio-ethanol production.
- Rs 100 crore for replacing outdated government vehicles.
- Rs 50 crore added to tackle wild animal attacks.
Fiscal Health and Future Growth – Kerala’s financial recovery has alleviated concerns over development budget cuts. The state is now positioned for a developmental “take-off,” focusing on sustainable economic progress.
