Kerala Finance Minister K.N. Balagopal has presented the Kerala Budget for the 2025-26 fiscal year in the State Legislative Assembly on Friday, February 7, 2025. The presentation began at 9 a.m., with significant announcements aimed at addressing both the state’s immediate challenges and long-term development goals.
One of the most notable announcements was the allocation of Rs. 750 crore for the rehabilitation of victims of the Wayanad disaster. Minister Balagopal emphasised that the project would be completed on time, with Rs. 750 crore earmarked for the first phase of the rehabilitation efforts.
Balagopal also addressed the state’s fiscal health, highlighting Kerala’s economic resilience despite challenges. He attributed the improvement in the state’s financial position to a 70% increase in its own tax collection over the past four years. He expressed concern over the central government’s consistent reduction of Kerala’s share in the divisible tax pool, dropping from 3.88% during the 10th Finance Commission period to 1.92% in the 15th Finance Commission period. The Finance Minister strongly criticised the Centre, accusing it of neglecting Kerala, which he claimed had contributed to the state’s financial difficulties.
“The central government did not show the same justice to Kerala as it did to other states,” Balagopal stated during his budget speech. “Despite this, Kerala has been able to function effectively due to the significant increase in our own revenue.”
In addition to the Wayanad rehabilitation, the Finance Minister unveiled plans for urban development, including the formation of Metropolitan Plan committees for Kochi, Kozhikode, and Thiruvananthapuram. This initiative is part of a larger effort to accelerate urbanization across the state. Balagopal also revealed that the operations of the Thiruvananthapuram Metro Rail will begin in the 2025-26 fiscal year.
The state’s welfare pension scheme was also a focus of the budget. Balagopal announced that unqualified individuals would be excluded from the scheme to ensure it benefits those who truly need it.
The Finance Minister concluded by tabling the Economic Review for 2024 and the final supplementary financial statement for the 2024-25 fiscal year. The general discussion on the budget will take place over three days—February 10, 11, and 12.
The ongoing Kerala Budget session, which commenced on January 17 with a policy address by Governor Rajendra Vishwanath Arlekar, resumed on Friday after a break. The session is expected to focus on several key areas of development, with the state’s economy and social welfare programs at the forefront of discussions.
Global Capability Centres focusing on R&D, advanced analytics, product management and digital transformation will come up in Kerala. These centres will provide job opportunities for Science, Technology, Engineering and Mathematics graduates. The budget allocates Rs 5 crore to conduct a feasibility study, and Rs 2 crore to organise an international conclave.