Kerala budget 2019: State govt announces ‘expansive’ budget with focus on rebuilding post deluge

Kerala budget 2019: State govt announces ‘expansive’ budget with focus on rebuilding post deluge

The cost of the budget is pegged at Rs 1.42 lakh crore this year, with an aim to reduce the fiscal deficit by 1 per cent and revenue deficit by 3.3 per cent.

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Kerala Finance Minister Thomas Isaac presented the state budget on Thursday. (Express Photo by Gajendra Yadav/File)

Kerala Finance Minister TM Thomas Isaac Thursday presented an expansive annual budget for the fiscal year 2019-20,  covering a wide range of sectors with special emphasis on rebuilding efforts post the devastating floods last year and aiming to open new avenues to generate non-tax revenues.

The cost of the budget is pegged at Rs 1.42 lakh crore this year, with an aim to reduce the fiscal deficit by 1 per cent and revenue deficit by 3.3 per cent.

Battered by the floods last year which slashed the state’s growth by at least 1.5 per cent and revenues not picking up despite the implementation of the Goods and Services Tax (GST), the finance minister had signalled in an interview with the Indan Express Wednesday that it would be suicidal for the government not to go for an expansive budget. He had hoped that the coming years would enable the government to go for fiscal consolidation through greater GST and VAT revenues and lay out a larger plan for investment.

Emphasis on ‘Navakeralam’ (New Kerala) project

The finance minister laid out 25 special programmes for ‘Navakeralam’ (New Kerala) project of the state government for the rebuilding of the state post-floods. A sum of Rs 250 crores would be set aside for village panchayats affected by the deluge. The Chief Minister’s Disaster Relief Fund (CMDRF) received Rs 3,229 crores till date, out of which Rs 1,732 crores have been spent on rehabilitation efforts.


The finance minister targeted the Centre for allowing just Rs 3,000 crores for flood relief and putting its foot down on accepting foreign aid and taking loans from monetary agencies.

“The question ‘why such cruelty to Keralites’ is resonating in the minds of every Malayali,” Isaac said.

The budget has allocated Rs 1,000 crores for the PWD department to rebuild roads and an equal amount for the Kuttanad region, considered the state’s granary. The region, situated lower than the sea level, remained submerged for weeks after the deluge, inflicting heavy losses for the paddy farmers. A duck breeding farm at a cost of Rs 16 crores will come up in Kuttanad.

An additional ‘flood cess’ of 1 per cent on the GST has been ratified in the budget.

Boost for coffee farmers in Wayanad

On the lines of the branding of ‘Araku Valley’ coffee in Andhra Pradesh by tribal communities, Isaac has announced a similar plan in Wayanad. The coffee grown in the hill district will be branded as ‘Malabar’ coffee and will carry a ‘carbon neutral’ tag. The ‘carbon neutral’ project, which aims to reduce the carbon footprint in a particular area to zero by planting more trees, is already underway in the Meenangadi panchayat.

Additionally, a KINFRA mega food park with common processing facilities for coffee will come up this year in order to enhance the revenues of coffee bean farmers. Steps would also be taken to procure ripe coffee beans directly from farmers.

Farming and plantation sector

The budget allocates Rs 5 crores to rejuvenate pepper farming in Wayanad and Rs 70 crores to increase the production of coconuts and getting a higher price for the same. Under the aegis of Kerala Coconut Council, 10 lakh coconut saplings will be planted every year with a special project titled ‘Keragramam’ designed to ensure scientific care of the trees.

Rs 20 crore have been allocated to set up rice parks of international standards at Thrissur, Palakkad and Alappuzha with the outlay for paddy cultivation set at Rs 91 crores. To enhance the support price of rubber, Rs 500 crore have been earmarked with a special company to be registered to take care of the same.

To rebuild the agricultural sector, Rs 2,500 crore has been set aside out of which Rs 770 crore is for plan outlay. Separate funds will be allocated for issuing soil health cards, floriculture, spices and availability of good quality seeds.

Bid to boost investments

A total outlay of Rs 574 crore has been earmarked for the IT sector with funds for Technopark (Trivandrum and Kollam), Technocity (Trivandrum) and Infopark (Kochi, Thrissur and Cherthala). Separately, Rs 10 crore has been set aside for the innovation zone at the Integrated Startup Complex in Ernakulam.

The Kerala Startup Mission has been a successful project and has served as an incubation factory for several innovative startups. A fund of Rs 70 crores has been allocated for the KSUM’s youth entrepreneurship programme.

North-South high-speed rail project

Construction on an independent, elevated double railway line connecting the state’s northern district of Kasaragod all the way to the southern point in Thiruvananthapuram will begin next year, the finance minister announced. The 515 km line can enable the trains to travel at 180 km/hr and thus complete the journey in just about four hours. Currently, superfast trains on the existing, highly-congested network take about 12 hours between the two points. An estimated expenditure of Rs 55,000 crores is required which can be availed through foreign loans and domestic fund mobilisation measures.

Rs 739 crores for Sabarimala temple

The Hindu pilgrim centre at Sabarimala, which witnessed chaotic scenes over the last four months, continues to receive a generous amount of funding in the state budget. Rs 739 crores have been allocated out of which projects for drinking water, roads between the base camps of Nilakkal and Pamba, midway shelter at Erumeli and sewage treatment plant at Pamba will be implemented.

Comprehensive health security scheme


In his budget, Isaac outlined a comprehensive health security scheme which involves upgrading primary health centers to family health centers, making private hospitals participating in the secondary and tertiary services and in its third stage, comprehensive health insurance.