The State Budget for the 2024-25 fiscal presented by Kerala Finance Minister K.N. Balagopal on February 5 (Monday) sought to mop up additional resources and draw private investment in key sectors, even as it proposed Chinese-model special development zones (SDZ) for tapping the potential of the Vizhinjam seaport project and a new ‘assured’ pension system for government employees.
Mr. Balagopal, who later described the Budget as a “platform for a forward leap for Kerala,” has sought to raise ₹1,067 crore in additional resources through a slew of rate revisions, including that of electricity duty, judicial court fees and other levies.
The Finance Minister started off his two-and-a-half hour speech in the Kerala Assembly saying that Kerala “is on the cusp of becoming a sunrise economy.” But Mr. Balagopal, who presented his fourth Budget on Monday, also mentioned a ‘Plan B’ (which, according to him, is in the works) to keep the State economy and development programmes afloat if the Union government’s “neglect towards Kerala” persists.
Left untouched
The Budget left the present ₹1,600 monthly social security pensions untouched, save for an assurance that the payments will be prompt in the coming fiscal. It also left untouched the levies on Indian-made foreign liquor (IMFL) and petrol and diesel that feed a social security seed fund announced in the last Budget.
In a bid to “revitalise” the construction sector, the government will undertake works to the tune of ₹1,000 crore, according to the Budget. The Budget has also earmarked ₹1,000 crore from the State’s development schemes to implement proposals from the Left Democratic Front (LDF) government’s Navakerala Sadas campaign.
The government has also decided to raise the support price of rubber by ₹10 to ₹180.
Private investment
While focussing on judicious public spending, Mr. Balagopal has also sought to attract private investments to the tune of Rs. 3 lakh crore within the next three years in sectors such as infrastructure and tourism, to enliven the economy.
“We cannot conclude that Kerala’s potential for development can be realised only after the challenges and crises have passed. Therefore, new development models need to be devised with the assistance of the private sector,” Mr. Balagopal said.
In line with the government’s policy of promoting private industrial parks, 25 new parks will be cleared in 2024-25.
‘Assured’ pension
A major announcement pertains to the pension system of government employees. The government seeks to replace the existing NPS with an ‘assured pension system.’ It would be implemented after studying new schemes used in other States, he said.
Tax growth trend to continue
The government expects the growth trend in tax revenues to continue in 2024-25. Kerala’s own tax revenue is projected to grow by ₹7,845.21 crore and non-tax revenue, by ₹1,503.41 crore over the 2023-24 revised estimates. The 2024-25 Budget envisions revenue receipts of ₹1,38,655.16 crore, revenue expenditure of ₹1,66,501 crore and capital expenditure of ₹15,596 crore. Fiscal deficit is pegged at ₹44,528.96 crore (3.4% of the GSDP) and revenue deficit, ₹24,846.05 crore.
‘Environment Budget’
For the first time, the State Budget features an ‘Environment Budget’ as a separate document. The government originally had plans to introduce it in the previous Budget. The Research and Development Budget, introduced last year, also accompanies this year’s Budget.
