Kerala Budget 2025 Highlights
➤ Wayanad Rehabilitation: Rs 750 crore has been allocated for the rehabilitation of victims of the Wayanad disaster. Minister Balagopal has committed to completing the project on time, with the allocated amount earmarked for the first phase of rehabilitation efforts.
➤ Financial Position: Kerala has shown economic resilience, with a 70% increase in its own tax collection over the past four years.
➤ K-Homes Project: Introduction of the K-Homes project to maximize the potential of unoccupied houses in the state and enhance tourism infrastructure. The project aims to provide affordable accommodation and will be implemented within a 10-kilometer radius of major tourist destinations such as Fort Kochi, Kumarakom, Kovalam, and Munnar in its pilot phase.
➤ Metro Projects: Special focus on Metro rail projects in Kochi, Kozhikode, and Thiruvananthapuram cities. The existing Kochi Metro line will be extended to more areas, and the proposed Metro projects in Kozhikode and Thiruvananthapuram would become a reality soon7. Thiruvananthapuram Metro project work will start this year.
➤ Social Welfare: The government has spent Rs 3,820 crore on scholarships for students from minority communities and Scheduled Castes/Tribes. Since the Centre has withdrawn scholarships for minority students of classes 1 to 8, the Kerala government has allocated Rs 200 crore for providing scholarships to them under its ‘Marg Deepam’ project2. Welfare pensions will reach Rs 50,000 crore.
➤ Infrastructure Development: Construction of 150 bridges across the state would be completed soon.
➤ Pending Payments: The final installment of Rs 600 crore for the revision arrears of service pensions will be paid this month. Two installments of salary revision arrears will also be granted within this financial year and merged into the Provident Fund (PF). Steps will be taken to disburse the two pending installments of Dearness Allowance (DA) arrears2. Outstanding pension arrears would be cleared in two installments this year4. The lock-in period for DA arrears has also been removed.
➤ KIIFB: The Kerala Infrastructure Investment Fund Board (KIIFB) will set aside Rs 500 crore for big projects. Steps will be taken to incorporate a revenue-generating mechanism into KIIFB, which is under a huge debt due to its borrowings for various development projects worth over Rs 87,000 crore2. The Centre must change its stance on KIIFB, as the financial burden now falls entirely on the state.
Kerala Budget: Other Key Announcements:
➤ An IT park will be set up in Kannur.
➤ Rs 700 crore allocated for the Karunya Health Scheme in 2025-26.
➤ Rs 11,431.73 crore allocated for the health sector in 2025-264.
➤ At least one lakh houses will be completed under the LIFE project in 2025-26. Rs 1,160 crore has been allocated for the LIFE project.
➤ Rs 200 crore has been sanctioned for the Karunya medical assistance scheme.
➤ New shipbuilding yard planned for southern Kerala.
➤ Global Kerala Centre to be established with a Rs 5 crore project.
➤ High-speed rail corridor. This announcement is related to the Silver Line project, a semi-high-speed rail corridor from Thiruvananthapuram to Kasaragod. The goal of this project is to reduce travel time along Kerala’s north-south corridor to less than four hours, connecting major cities
➤ The state police and the public relations department will launch a joint project to tackle cyberbullying and fake news.
➤ Rs 10 crore for research into cost-effective methods of manufacturing bio-ethanol in state.
➤ Rs 100 crore to replace old and outdated government vehicles.
➤ An additional Rs 50 crore for the special package to deal with wild animal attacks in the state.
➤ Fiscal Health: The state has witnessed financial recovery, alleviating the need to cut down development projects. Kerala is now prepared for a developmental “take-off,” underscoring the government’s commitment to economic progress.
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