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Kerala: To Counter Squeeze From Centre, Budget Plans to Mop up Revenue, Focus on Development

Neelambaran A |
In a political message, the cover page of the LDF government’s budget document was printed with the preamble of the Indian Constitution.
Kerala Budget

The Kerala budget hopes to increase employment opportunities, attract investments in various key sectors and evade the threats of a possible recession, said finance minister K N Balagopal, who presented it on Monday. He termed the state as a ‘Sunrise Economy’, with focus on new generation technologies. 

In a political message, the cover page of the budget document was printed with the preamble of the Indian Constitution.

The budget aims at sustainable growth, improved infrastructure development, continued development in the industrial sector, science and technology, marching towards the knowledge economy while continuing the welfare measures for the deserved sections.

While asserting that the financial crisis that the Opposition-ruled state was facing was due to the Centre’s “negligent approach”, Balagopal said, nothing would dent the progress of the state.

The finance minister demanded that the Centre provide the dues to the state. He termed the state as a ‘Sunrise Economy’, with focus on new generation technologies. 

Several important announcements were made in the finance minister’s budget speech, such as allocations for different departments, including public education system, local self-governments, agriculture, health insurance, women safety, housing, women development corporation and infrastructure besides allocations for traditional and new generation industries. 

The state’s revenue receipts are estimated to increase to Rs 1,38,655.16 crore while the revenue expenditure is expected to increase to Rs 1,66,501.21 crore, while the revenue deficit is expected to be at Rs 24,846.05 crore. The fiscal deficit is expected to be Rs 44,529 crore at 3.4% of the GDP.  


The finance minister accused the Union government of sidelining the needs of Kerala in the recently presented interim budget. 

With the state registering a sustained growth rate since the COVID-19 pandemic and unprecedented flooding twice in the past five years, the budget aims to attract more investments and generate employment.

The traditional sectors of the state, including coir, cashew, handloom and the new sectors including graphene, robotics, information technology (IT) have been given due consideration in the budget.  

The budget has allocated Rs 34,530 crore in capital investment sectors, including the Kerala Infrastructure Investment Fund Board (KIIFB), which is entrusted with carrying out infrastructure projects, including roads and buildings. 

With a strong and decentralised local self-government system, which directly implements the programmes and projects of the government, the department has been allocated Rs 8,532 crore, which is 28% of the state scheme contribution.

For the public health sector, the budget has allocated Rs 2,052.23 crore, Rs 1,768.32 crore for rural development, Rs 1,736.63 crore for public education, Rs 1,975.04 crore for the transport sector, Rs 1,729.13 crore for industry and minerals and Rs 1,000 crore for revitalising the manufacturing sector.

Balagopal, while accusing the Centre of sharing Rs 21 with the state from the Rs 100 collected as tax, said that the government would explore inviting investments from public and private sectors. “We aim to formulate short term projects to generate employment and income, along with medium- to long-term projects”, he said.

With the government planning to explore areas, such as tourism and related development activities, development of industrial corridors, IT and ITeS sectors, the investment for the next three years is expected to be around Rs 3 lakh crore, as public spending remains the focus of the Left Democratic Front (LDF) government. 

For the first time, the ‘Environment Budget’ was included as a separate document, while the research and development budget was also included for the second time.  


The Kerala government has also announced plans to introduce a revised pension scheme even as uncertainty looms over the Contributory Pension Scheme (CPS). It said it would also roll out an exclusive insurance scheme for Rs 2 lakh cover for Anganwadi workers. 

In addition, the LDF government has increased the support price of rubber to Rs 180 per kg, an increase of Rs 10 per kg, despite the farmers pressing for a minimum support price (MSP) from the Union government.  Besides this, Rs 9 crore has been allocated to Kerala Rubber Limited. 

The agriculture sector has been allocated Rs 1,698 crore, with the cooperative sector getting Rs 134.42 crore, and Rs 50 crore for extreme poverty eradication. The welfare pension of Rs 1,600 per month to around 64 lakh beneficiaries has not been increased in this budget. 

In a big relief to homeless people, the budget earmarked Rs 1,132 crore for the LIFE Mission with the aim of completing construction of five lakh houses by March 31, 2025. 

With the state’s finances registering a slump due to the reduced share of revenue from the Union government, the budget also announced increasing of duties on electricity generation and judicial stamp fee. 

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