Union Budget 2025: Kerala’s wish-list largely untouched, hopes for ₹24,000-crore economic package dashed

Kerala's wish-list largely untouched in Union Budget 2025-26, missing out on economic package, port project assistance, and other demands.

Union Finance Minister Nirmala Sitharaman’s 2025-26 Budget presented on Saturday (February 1, 2025) has left Kerala’s wish-list largely untouched, dashing the State’s hopes for a ₹24,000-crore economic package and a ₹5,000-crore special assistance for the Vizhinjam port project.

The State’s demands for a ₹2,000-crore prop-up for the rehabilitation process in landslide-hit Wayanad, an All India Institute of Medical Sciences (AIIMS)-equivalent facility, which has been a long-pending demand, and State-specific packages for tackling human-wildlife conflict and emerging climate change-related challenges also did not find a place in the Budget.

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Kerala’s plea for the special economic package to tackle the current liquidity crisis and the assistance for the Vizhinjam port project had featured in the State’s wish-list for the 2024-25 Budget as well.

That said, Ms. Sithraman’s announcement that capacity would be expanded in the Indian Institutes of Technology (IIT) that were opened after 2014 is expected to benefit IIT Palakkad. Also, the decision to extend the Jal Jeevan Mission (JJM) to 2028 with an expanded outlay will help Kerala, which currently is placed last at the national level in terms of the coverage achieved.

Kerala’s request that an additional borrowing of 0.5% of the gross State domestic product (GSDP) tied to power sector reforms be extended to 2025-26 has found a place in the Budget.

Further, it remains to be seen how the Budget proposals concerning the development of top 50 tourist destination sites in the country and the plans to “unlock the untapped potential” of the marine fisheries sector would work out for Kerala.