Thiruvananthapuram: In a major shocker, Kerala Finance Minister KN Balagopal increased the land tax by a staggering 50 per cent in the Kerala Budget 2025. This is expected to bring an additional income of Rs 100 crore for the state. A slew of projects have been announced for Kollam and Kannur, districts represented by Balagopal and Chief Minister Pinarayi Vijayan, respectively. Lease amount for state-owned land has also been increased.

The minister also announced an increase in court fees, stating that it is expected to bring an additional revenue of Rs 150 crore. In the transport sector, taxes on electric vehicles and contract carriage vehicles have been increased, estimated to generate an additional Rs 15 crore. However, taxes on stage carriage vehicles have been reduced by 10%.

The budget also proposes a 50% hike in taxes for motorcycles, three-wheelers, and other private vehicles older than 15 years, as part of efforts to regulate ageing vehicles on the road.

In a two-and-a-half-hour-long speech on Friday, the finance minister announced that Rs 750 crore will be allocated to rehabilitate the people hit by Wayanad landslides in the first phase of the project.

The minister also announced that the final instalment of Rs 600 crore for the Service Pension revision arrears would be paid in February. The remaining two instalments of the salary revision arrears will be disbursed within this financial year and merged into the Provident Fund. Steps will be taken to release the two pending instalments of DA (Dearness Allowance) arrears.

The budget has increased the allocation for local self-governing institutions to Rs 15,980.41 crore, with Rs 2,577 crore earmarked as the General Purpose Fund. Rs 178.94 crore allocated for KSRTC. Rs 107 crore set aside for purchasing modern buses.

Land acquisition will also take place every 25 km along the coastal highway and Rs 500 crore has been allocated for the development of inland waterways. Additionally, the Vizhinjam-Punalur corridor has been included in the budget as a key infrastructure initiative.

Thiruvananthapuram, Kozhikode Metros
Balagopal announced that work on the first phase of the Thiruvananthapuram Metro will commence in 2025-26, while plans are also being developed for the Kozhikode Metro. Additionally, Kochi, Kozhikode, and Thiruvananthapuram will have a metropolitan development plan to boost urban growth.

K-Homes
The minister also announced an initiative aimed at realising the potential of vacant houses in Kerala and improving tourism infrastructure. It adopts management practices from similar enterprises around the world and provides affordable accommodation. Apart from income for the house owners, this will also ensure the security and maintenance of the vacant house.

The pilot project will be implemented within a 10 km radius of tourist areas like Fort Kochi, Kumarakom and Kovalam. Rs 5 crore have been allocated for its initial expenses.

IT park for Kollam, Kannur
In a bid to generate revenue and promote IT infrastructure, an IT park will be set up in Kollam on Kollam Corporation’s land in collaboration with KINFRA and KIIFB. The Finance Department has also set aside Rs 293.22 crore for an IT park in Kannur.

The Finance Minister began the budget speech by declaring that the state has overcome a critical phase of financial strain. He stated that the government chose to be transparent about the financial challenges rather than concealing them. The financial crunch did not affect development activities, and Kerala is now ready for a takeoff, Balagopal added.

Opposition leader V D Satheesan expressed his protest over the Economic Review not being provided to the legislators in advance. He stated that the Finance Minister's action ignored the Speaker's ruling. The Speaker emphasized that steps should be taken to ensure the financial review is given to the members in advance and that such incidents should not be repeated in the future.

For sector-specific announcements, click here: Kerala Budget 2025