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Russia-Ukraine War Features in Kerala Budget, Push for IT, Energy, Higher Education Sectors

Kerala finance minister KN Balagopal presenting the state budget, in Thiruvananthapuram, Friday, March 11, 2022. (PTI Photo)

Kerala finance minister KN Balagopal presenting the state budget, in Thiruvananthapuram, Friday, March 11, 2022. (PTI Photo)

Kerala finance minister KN Balagopal also said in his budget speech that the economic policies of the union government are pushing the state governments into a severe financial crisis.

Among the highlights of the Kerala budget presented on Friday is Rs 10 crore has been earmarked to help students who returned from war-hit Ukraine to continue their studies and to provide special assistance to those among them who lost their documents and certificates to recover these.

State finance minister KN Balagopal said that the Kerala government has also decided to have a “global peace conference’ on nuclear disarmament and world peace, and an amount of Rs 2 crore has been earmarked for this.

With the intensifying of the Russia-Ukraine war, the prices of goods are increasing rapidly in various corners of the world. Inflation is emerging as a high-priority issue for the state in 2022-23. Rs 2,000 crore has been set aside in the budget for surviving this threat and ensuring food security, announced Balagopal.

Here are some of the key things the minister said in his budget speech:

The government aims for radical changes in the higher education sector. Translational research centres will be developed on the university campuses of Kerala. Startups and incubation centres will be set up along with these. For this, a total amount of Rs 200 crore will be spent through the Kerala Infrastructure Investment Fund Board (KIIFB).

A total of 1,500 new hostel rooms will be constructed in the campuses of Kerala, Mahatma Gandhi, Cochin, Calicut and Kannur universities in a timebound manner. Apart from this, 250 international hostel rooms will also be constructed. An amount of Rs 100 crore will be made available through KIIFB for this project.

The government started the Knowledge Economy Mission for providing 20 lakh employment opportunities in the knowledge economy sector. An amount of Rs 350 crore has been earmarked for district skill parks through KIIFB.

The government will encourage arts and science colleges, professional colleges, polytechnic colleges, ITIs, to undertake skill courses as part of the extension of the skill eco-system in the state. This project will be implemented on a ‘one constituency- one institution’ basis in all 140 assembly constituencies. An amount of Rs 140 crore will be earmarked from KIIFB for this.

An amount of Rs 100 crore has been provided through KIIFB for setting up a medical tech innovation park in Thiruvananthapuram.


Kerala is at the forefront after national capital Delhi in terms of internet mobile expansion. Almost 60% of the Keralites have smartphones. Mobile network service is available in 100% of the state. With the commissioning of K-FON, Kerala will become the state with the biggest high-speed fibre data connectivity.

2,000 Wi-Fi hot spots will be set up across the state for increasing the reach of government services to citizens. Bringing more services through the K-Fi network, increasing the Wi-Fi coverage, establishing Wi-Fi hotspots in coastal fishing villages and backward tribal hamlets across the state are the major objectives of the project. At present, 2,023 Wi-Fi hotspots have been established across the state by which a maximum of 44,000 beneficiaries could use up to 8 TB of data per day. An amount of Rs 16 crore has been allocated for this project.

A new IT park will be set up in Kannur. For IT Corridor extension, a facility covering an area of 5,00,000 sq ft will be set up in Kollam. Satellite IT parks will be established in 15 to 25 acres of land, which will be purchased at premium rates through land acquisition on the proposed corridor having easy access via NH 66 from Ernakulam, Kozhikode and Technopark Phase III. An amount of Rs 100 crore will be additionally provided for the project through KIIFB.

Work near home

The concept of ‘work from home’ may prevail and continue on a large scale even in the post-Covid period. We may utilise the possibility of working online from villages and small towns for companies across the globe. Like ‘work from home’, the ‘work near home’ concept is also getting acceptance. When IT-based employment centres become operational across the state, the educated, including housewives, can engage in jobs. An amount of Rs 50 crore has been earmarked for this project.

Four science parks will come up with an investment of Rs 1,000 crore, each in an area of 10 lakh sq ft in two blocks.

From 2023-24, a document named ‘Environment Budget’ depicting the environment-related expenses will be presented. With this Kerala will become a state that makes an important environment-friendly advancement.

Rs 54 crore has been set aside in the budget for enhancing the rice production of Kuttanad paddy fields by minimising crop loss.

Also, Rs 33 crore has been allocated for implementing projects intended for mitigating the threats of flood in the Alappuzha and Kottayam districts.

For Idukki, Wayanad and Kasaragod packages, an allocation of Rs 75 crore each is earmarked.

Rs 30 crore has been set aside for undertaking activities related to the Sabarimala master plan.


Rs 1,152.93 crore has been earmarked for the energy sector this year. Of this, Rs 44.44 crore is for the Agency for Non-conventional Energy and Rural Technology (ANERT).

Rs 3 crore has been allocated to install 300 kW capacity microgrids in unelectrified remote tribal areas located in the forestlands.

Solar pushcarts with batteries and other equipment for lighting and operational facility of electrical gadgets will be provided to street vendors.

One kilowatt small wind-solar hybrid power systems will be set up on a pilot basis in boats engaged in deep-water fishing, to get backup power and to save fuel. The scheme will be extended based on the successful demonstration and evaluation of the project.

Initiatives will be started for establishing an airstrip network for the air travellers who intend to fly from one domestic tourist spot to another in the state, by using 20-40 seater planes, helicopters, and for drone-based transportation. An amount of Rs 125 crore is the anticipated expenditure for each airstrip with terminal buildings. Funds for terminals and airstrip will be met through KIIFB. This project will be implemented through the PPP model.

Thiruvananthapuram Outer Ring Road, which starts from NH 66 at Navaikulam near Parippally and ends at Vizhinjam Bypass, connects the main carriageway with all leading radial and arterial roads of the state capital. This 78.880 km road is initially being designed as a four-lane carriageway but is expandable up to 6 lanes in future. National Highways Authority of India has approved the project to be undertaken under the ‘Bharatmala Pariyojana’. The project is estimated to cost Rs 4,500 crore, of which, the state government has committed to meet 50% of the land acquisition cost amounting to Rs 1,000 crore. This will be provided through KIIFB.

Global warming and climate change adversely affect Kerala. Extensive programmes will be implemented on environmentally friendly activities and to create awareness of such adverse effects. The total outlay earmarked for scientific services and research on this is Rs 220.77 crore.

Latin American ties

Rs 2 crore is earmarked in the budget for study, research and follow up projects of the Latin American Centre. Latin America has a great influence on the socio-political, cultural and agricultural spheres of Kerala. Latin American crops have been cultivated here since the arrival of the Portuguese in Kerala. Due to geographical similarities, the crops and farming are also suitable for Kerala. It is necessary to formulate plans that will utilise the potential of Kerala and Latin America.

Such comparative studies and research will be encouraged under the guidance of the Centre for Latin American Studies at the University of Kerala. The relationship with Latin America needs to be strengthened through projects including student exchange programmes.

A museum will be set up to provide comprehensive information on the growth and development of the Malayalam film industry.

A project will be implemented to achieve the target of having ‘one sports facility/playground in every panchayath’ with Sports Kerala Foundation being the implementing agency. Half of the expenditure of the scheme will be met from MLA special development fund (SDF) through local self-government institutions (LSGIs) and public-private partnership (PPP). School playgrounds will also be included in the purview of this scheme. An amount of Rs 4 crore has been earmarked for the initial activities of the project.

The outlay provided in the medical and public health sector during the financial year 2022-23 is Rs 2,629.33 crore. This is Rs 288 crore more than the previous year’s allotment. An amount of Rs 742.2 crore is expected from centrally sponsored schemes as central share. Rs 484.8 crore and Rs 10 crore have been earmarked as state shares for the National Health Mission and National Ayur Mission respectively.

An amount of Rs 2 crore is earmarked for the Studio Apartment Scheme for women working in urban areas.

The guest workers who come to Kerala for employment will have to register either through the web portal or through the mobile app and obtain a unique identification number. An amount of Rs 40 lakh has been provided for the Kerala Athidhi Mobile App Scheme.

Gender Budget

During 2022-23, the total outlay for the Gender Budget has been enhanced to Rs 4,665.20 crore. This comes to 20.90% of the state’s total plan outlay. Apart from continuing the existing scheme, 16 new schemes will be commenced for ensuring the social security of women, children and transgender people. The major objectives of the 2022-23 Gender Budget are gender-friendly amenities and secure shelter for women.

The state government plans to set up 28 new fast-track special courts in 2022-23, in addition to the existing 28 courts for the disposal of the cases registered under the Protection of Children from Sexual Offences (POCSO) Act.

A new mobile application named Lucky Bill App will be introduced for submitting tax returns. GST invoices can be uploaded by the public through this application. Selected users will be given gifts. The State Goods and Services Tax department can examine the status of the tax return filings. This application will help to ensure the taxation rules are strictly followed. An amount of Rs 5 crore has been allocated for the Lucky Bill App.

The basic land tax rates would be increased in a calibrated manner in all the slabs. It is expected that this will result in additional revenue of about Rs 80 crore.

The fair value of land is not in tune with the current market values in many areas of the state. The government has undertaken massive infrastructure projects like national highway expansion, metro rail project, core road network extension, etc, as a result of which the market values of land have increased manifold in the neighbouring areas. To address the issues of anomalies in the fair value, the government will constitute a high-level committee to look into this and ensure that fair values reflect the actual ground realities.

A one-time increase of 10% will be implemented in fair values across all segments. It is expected to result in additional revenue of about Rs 200 crores.

The one-time motor vehicle tax on motorcycles costing up to Rs 2 lakh is increased by 1%. This is expected to bring in revenue of about Rs 60 crore per year.

The central government has introduced a scrapping policy to address the issues of pollution due to old vehicles. It is also necessary to discourage the use of diesel vehicles and encourage electric vehicles. The green tax imposed on the old vehicles (above 15 years) has been increased by 50%. In addition, the green tax will also be levied on the following categories of diesel vehicles except for motorcycles: three-wheeler vehicles, private motor vehicles, medium motor vehicles, heavy motor vehicles and other diesel vehicles. It is expected to result in additional revenue of about Rs 10 crore.

Blaming Centre

The budget also said, “Economic policies of the union government are pushing the state governments into a severe financial crisis. Burden is being imposed on states by denying eligible fiscal share, increasing indirect taxes and curtailing the percentage of eligible share from the divisible pool. As for Kerala, there is a sharp decline of fiscal share from the Centre. Against the policies of the central government in taking away the rights of the state, Kerala will take initiative to put up a staunch defence by bringing together other states in the country.”

The budget said Kerala is going to have a shortfall of around Rs 11,000 crore in GST compensation after June 2022. The central government is going to dispense with the system of GST compensation.

The finance minister said, ”Kerala receives only one percentage of share as part of centrally sponsored schemes. Political pressure needs to be exerted at the national level to enhance central share either through special packages considering the socio-economic achievements and peculiarities of Kerala or through need-based projects.”

The budget speech also said, “In short, the change in policy of the central government in allocating the resources to the state is mainly pushing Kerala into financial difficulties.”

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first published:March 11, 2022, 16:54 IST