Finance Minister K.N. Balagopal on Friday described the 2025-26 Budget as one “that can do a lot for the State’s future”.
Repeating that the State is poised to be in a “much better fiscal position” in the coming years, Mr. Balagopal said the Budget had strived to touch upon all the sectors, with new projects designed to spur growth.
Things were looking up for economic growth in Kerala, especially on account of the improvement in the State’s tax revenues, he pointed out, addressing a press conference after presenting the State Budget in the Assembly.
The State’s own tax revenue (SOTR) which stood at ₹47,660 crore in 2020-21 was expected to grow to ₹81,000 crore by the end of the 2025-26 fiscal.
On the tax proposals, he sought to allay fears that the 50% hike in the land tax rates would burden the common people. Mr. Balagopal said the hike in the lowest slab rate was from ₹5 per Are (2.47 cents) a year to ₹7.5, and in the highest, from ₹30 per Are to ₹45. The Budget speech had noted that the basic tax now levied on land was “quite nominal.”
Primary focus
On the absence of any announcement regarding a hike in social security pensions, Mr. Balagopal said the primary focus was on settling the arrears first.
He said the government would not go back on the LDF election manifesto promise that the pensions would be hiked to ₹2,500 per head. “When the manifesto was prepared, Kerala was not facing a cut of more than ₹50,000 crore in its resources,” he pointed out.
Last year, five monthly instalments were pending, of which two had been paid. Next year, three more (₹3,000 crore) needed to be settled, he said.
On the ₹750-crore project announced in the Budget for the rehabilitation process in Wayanad, Mr. Balagopal reiterated that resource crunch would not prove a hurdle. The government hoped to complete the process in a year’s time, he said.
Mr. Balagopal said the Budget had, for the first time, looked at capital spending from the perspective of ‘effective capital expenditure,’ where the capital expenditure incurred by institutions, including local bodies, in addition to the capital expenditure earmarked in the Budget had been taken into account.
Published – February 07, 2025 08:21 pm IST