Kerala Finance Minister says state has survived 'most intense' phase of financial crisis

Thiruvananthapuram: Kerala Finance Minister K N Balagopal on Friday, while presenting the budget for the financial year 2025-26 in the Assembly, said the state has survived the most intense phase of financial crisis without any of its welfare schemes or development work being affected.

Presenting the second Pinarayi Vijayan-led government's fifth budget in the Legislative Assembly, Balagopal announced a Rs 750 crore project for the rehabilitation of the Wayanad landslides victims.

Balagopal said that the Mundakkai and Chooralmala villages in Wayanad witnessed an extreme calamity that plunged Kerala into deep sorrow.

The disaster claimed over 200 lives, destroyed hundreds of properties and thousands lost their livelihoods with the estimated loss due to the landslides being around Rs 1,202 crore, while the cost of rehabilitation is expected to be approximately Rs 2,221 crore, as assessed by a team of experts, the minister said.

He said the 2025-26 Union Budget has not allocated any assistance for the Mundakkai-Chooralmala disaster.

"The state government still hopes that the Centre will extend the same support to Kerala as it did to other states," he said.

The Minister said the Left government is committed to fulfilling its promises.

"Rehabilitation efforts will be completed within the stipulated time," Balagopal added.

During his address, the minister also said that despite the financial crisis faced by the state, it carried out all social welfare schemes and development projects.

Balagopal said that the government has spent Rs 3,820 crore on scholarships for the students belonging to minority communities and Scheduled Castes/Scheduled Tribes.

He further said that since the Centre has withdrawn scholarships for minority students of classes 1 to 8, the Kerala government has allocated Rs 200 crore for providing scholarships to them under its 'Marg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' project.

The other allocations included, 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crore for research into cost effective methods of manufacturing bio-ethanol in state, Rs 100 crore to replace old and outdated government vehicles and an additional Rs 50 crore for the special package to deal with wild animal attacks in the state.

The minister also said that the state government expects to open the expanded National Highway to the public by the end of 2025.

In the budget, Balagopal also introduced the K-Homes project to maximize the potential of unoccupied houses in the state and enhance tourism infrastructure.

The initiative aims to provide affordable accommodation by adopting operational models from similar projects worldwide, he said.

Beyond generating income for homeowners, the project will also ensure the security and maintenance of vacant houses, the minister said.

"As a pilot phase, the project will be implemented within a 10-kilometre radius of major tourist destinations such as Fort Kochi, Kumarakom, Kovalam, and Munnar. Based on its success, the initiative will be expanded statewide," Balagopal said .

He further said that the Thiruvananthapuram metro project work will start this year.

Additionally, the Finance Minister announced that the final installment of Rs 600 crore for the revision arrears of service pensions will be paid this month.

"The 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) arrears," he said in his budget address.

Balagopal also said that the Kerala Infrastructure Investment Fund Board (KIIFB) will set aside Rs 500 crore for big projects. The minister also said that 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 crore.

Prior to Balagopal presenting the budget, Leader of Opposition in the state assembly V D Satheesan raised a point of order by saying that no economic review was placed in the House ahead of tabling the budget. He said that he had raised the issue earlier and the then Speaker had ruled that not placing the economic review ahead of the budget should not become a precedent.

"That ruling of the Chair has been violated two years after it was made. It is an impropriety. The Chair should ensure it does not happen again," he said.

Speaker A N Shamseer said that placing the economic review ahead of the budget was important and expressed hope that measures will be taken to ensure it is done in future.

Budget discussions will take place during February 10-12, while the debate and voting on supplementary grant requests will be held on February 13.