Kerala’s Finance Minister K.N. Balagopal presented the state budget for 2025-26, in the State Legislative Assembly on Friday, February 7, 2025, which includes plans for infrastructure development like metro projects, high-speed rail corridors, tourism initiatives, and significant welfare investments.
The budget emphasises Metro rail projects in Kochi, Kozhikode, and Thiruvananthapuram, high-speed rail corridors, the ‘K-Homes’ initiative to transform unused properties into tourism accommodations, and rehabilitation efforts for Wayanad.
Let’s dive into the details and explore the key announcements that are set to shape the state’s infrastructure, economy, and social welfare programs.
In terms of Kerala’s financial health, the state has shown resilience, with a 70% increase in its own tax collection over the last four years. This improvement in revenue generation underscores the state’s strengthening economic position.
Despite challenges, Kerala’s financial recovery has laid the foundation for future development projects, reinforcing the government’s commitment to economic growth.
The Kerala Budget 2025 allocates ₹750 crore for the rehabilitation of victims affected by the Wayanad disaster. The Finance Minister, K.N. Balagopal, has committed to ensuring the timely completion of this project.
The amount will be utilised in the first phase of rehabilitation efforts, aimed at addressing the immediate needs of those impacted and restoring the region to its previous state. This initiative highlights the government’s focus on both short-term relief and long-term recovery for affected communities.
The Kerala government has introduced the K-Homes project as part of its budget for 2025-26. This innovative initiative aims to repurpose vacant houses across the state, converting them into budget accommodations for tourists.
The pilot phase of the project will focus on areas within a 10-kilometer radius of popular tourist destinations like Fort Kochi, Kumarakom, Kovalam, and Munnar. The objective is to boost tourism while simultaneously enhancing the availability of affordable lodging.
This project is expected to improve tourism infrastructure and generate income from underutilised properties, benefiting both the tourism sector and local communities.
The Kochi Metro will receive a significant extension under the 2025 budget. Currently operational in certain parts of the city, the metro will be extended to more areas. The proposed metro system in Kozhikode will soon become a reality.
The budget includes funding for the initial phases of this project. In addition to metro expansions, the budget also highlights plans to develop high-speed rail corridors, which will help link cities across Kerala faster and more efficiently.
This will support the state’s push toward sustainable transport solutions and create economic opportunities by connecting major hubs with minimal travel time.
| Announcement | Details |
| IT Park in Kannur | An IT park will be set up in Kannur to boost the tech sector and create more job opportunities. |
| Karunya Health Scheme | ₹700 crore allocated for the Karunya Health Scheme in 2025-26 to ensure medical support for the underprivileged. |
| Health Sector Allocation | A total of ₹11,431.73 crore allocated for the health sector in 2025-26 for improved healthcare facilities. |
| LIFE Project | One lakh houses will be completed under the LIFE (Livelihood Inclusion and Financial Empowerment) project in 2025-26 with ₹1,160 crore allocated. |
| Karunya Medical Assistance Scheme | ₹200 crore sanctioned for the Karunya medical assistance scheme, helping people with medical needs. |
| Shipbuilding Yard | A new shipbuilding yard will be established in southern Kerala to boost the maritime industry. |
| Global Kerala Centre | The state will establish a Global Kerala Centre with a ₹5 crore project to promote Kerala globally. |
| High-speed Rail Corridor | Related to the Silver Line project, a semi-high-speed rail corridor from Thiruvananthapuram to Kasaragod. The project aims to reduce travel time to under four hou₹across Kerala’s north-south corridor. |
| Cyberbullying & Fake News Project | A joint initiative by the State Police and the Public Relations Department to combat cyberbullying and fake news. |
| Bio-Ethanol Research | ₹10 crore allocated for research into cost-effective methods of manufacturing bio-ethanol in Kerala. |
| Government Vehicle Replacement | ₹100 crore to replace old and outdated government vehicles with more efficient and environmentally friendly alternatives. |
| Wild Animal Attacks Package | An additional ₹50 crore allocated for the special package to address wild animal attacks in the state. |
Kerala’s 2025 Budget presents an ambitious roadmap for growth, focusing on transformative infrastructure projects, social welfare initiatives, and economic recovery. With substantial investments in metro projects, health schemes, and sustainable development, the state is poised to enhance its connectivity, promote tourism, and uplift its citizens’ quality of life.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Feb 10, 2025, 2:29 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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