The government is planning to establish Vizhinjam as a major export-import (EXIM) port on a par with global giants like Singapore, Rotterdam, and Dubai.
Published Feb 07, 2025 | 7:23 PM ⚊ Updated Feb 07, 2025 | 7:23 PM
Vizhinjam International Seaport Thiruvananthapuram
Synopsis: In a bold move to position Kerala as a digital powerhouse, the finance minister has unveiled a slew of infrastructure projects, AI-driven initiatives, and financial support for startups.
In a strategic push to transform Kerala into an economic powerhouse, the state government has outlined an ambitious development roadmap in the Kerala Budget 2025-26.
The plan focuses on key sectors, infrastructure expansion, and investment-friendly policies, with special emphasis on establishing Vizhinjam as a major export-import (EXIM) port on a par with global giants like Singapore, Rotterdam, and Dubai.
Finance Minister KN Balagopal, while presenting the Budget, highlighted Kerala’s investor outreach at the World Economic Forum in Davos and the recently held Vizhinjam Investment Conclave.
These efforts have reportedly generated significant interest from global industry leaders, particularly in maritime and logistics infrastructure.
The total outlay of the industrial sector for the year 2025-26 is ₹1831.36 crore.
The government’s roadmap for economic transformation rests on four key pillars:
Vizhinjam-Kollam-Punalur Growth Triangle (VKP-GT)
The government has announced the Vizhinjam-Kollam-Punalur Growth Triangle (VKP-GT) to boost Kerala’s transport and logistics network.
This project will enhance major corridors such as NH-66, NH-744, Main Central (MC) Road, the Coastal Highway, and key railway lines. Multi-modal parks, manufacturing hubs, logistics centers, and storage facilities will be developed through Public-Private Partnerships and Special Purpose Vehicles (SPVs).
West Coast Canal Economic Zone
With Kerala’s inland waterways spanning 1,800 km, the West Coast Canal (Kovalam-Bekal) has been identified as a priority area for tourism, freight transport, and economic activity. ₹500 crore has been allocated for rejuvenating this corridor, with development hubs planned for agro-tourism, backwater tourism, boat manufacturing, and fisheries.
Coastal Highway Growth Plan
Stretching from Poovar in Thiruvananthapuram to Thalapady in Kasaragod, the Coastal Highway will become an economic corridor with planned developments every 25 km. Private investment will support beach promenades, cycling tracks, EV charging stations, and hydrogen refueling stations.
Thiruvananthapuram Outer Area Growth Corridor (OAGC)
A 63-km Outer Ring Road will connect Vizhinjam with Navaikulam, forming an Outer Area Growth Corridor (OAGC). Economic hubs at Kovalam, Kattakkada, Nedumangad, and Kilimanoor will be developed as self-sufficient townships through land pooling.
Global Capability Centers (GCCs) & Knowledge Economy
Recognising the global trend of multinational corporations establishing high-value Global Capability Centers (GCCs), Kerala aims to attract these hubs, which contribute $64.6 billion annually to India’s economy. An allocation of ₹5 crore has been set aside for developing GCC parks, with ₹2 crore earmarked for hosting an international GCC conclave.
The government is committed to positioning Vizhinjam beyond just a transshipment hub, envisioning it as a full-fledged EXIM port. However, Minister Balagopal pointed out that Kerala has shouldered the entire financial burden of the port’s development, despite the Union government’s initial promise of viability gap funding.
To further capitalise on maritime logistics, the state will push for the establishment of a shipyard in southern Kerala, aligning with the Union Government’s acknowledgment of India’s shipbuilding lag.
Additionally, major upgrades to state highways will be undertaken to accommodate the anticipated surge in container traffic post-Vizhinjam’s operationalisation.
The state government has also announced plans to allocate 100 acres to facilitate the establishment of official business development centers for other Indian states. This initiative aims to channel industrial and commercial activities, leveraging the strategic advantages of Vizhinjam Port for increased trade and economic growth.
In a bold move to position Kerala as a digital powerhouse, the state government has unveiled a slew of infrastructure projects, AI-driven initiatives, and financial support for startups.
With a total outlay of ₹517.64 crore—₹10.5 crore more than the previous year—the Budget underscores Kerala’s commitment to becoming a global leader in the digital revolution.
One of the standout announcements is the establishment of an IT park near Kannur Airport. With ₹293.22 crore allocated from KIIFB, the project will develop a 5-lakh sq. ft. facility on a 25-acre campus, boosting the state’s IT ecosystem and creating significant employment opportunities.
Additionally, the government has introduced two pilot IT park projects aimed at utilising land owned by local self-governments (LSGIs), government departments, and public sector undertakings (PSUs).
The first such project will be set up in Kollam City on land owned by the Kollam Corporation, under a tripartite agreement between KIIFB, KINFRA, and the Corporation, with the first phase targeted for completion by 2025-26. The second project will be established at the Kallada Irrigation Project campus in Ravi Nagar, Kottarakkara, featuring a state-of-the-art 97,370 sq. ft. built-up space.
“These pilot projects will serve as models for LSGIs, giving them the confidence to acquire land and invest in revenue-generating developments,” the finance minister said, adding that a seed fund of ₹1,000 crore has been set aside to support LSGIs willing to undertake such initiatives.
In a significant step toward embracing artificial intelligence and digital innovation, the budget allocates funds for a world-class GPU cluster in Thiruvananthapuram, which is expected to establish Kerala as a key hub for AI and AVGC (animation, visual effects, gaming, and comics) industries. The initiative aims to attract major investments and create jobs in cutting-edge technology sectors. An additional ₹10 crore has been earmarked for this endeavor.
The Budget also highlights Kerala’s increasing focus on AI-driven solutions by announcing a national-level hackathon to develop Agentic AI systems for various applications. The government has set aside ₹1 crore for the initiative, with ₹20 lakh each allocated for five selected AI-based ideas.
To foster startup growth and innovative work environments, the budget provides ₹2 crore to expand ‘Freedom Square,’ an experimental workplace model that promotes interdisciplinary collaboration among college-based Innovation and Entrepreneurship Development Centers across all 14 districts.
Recognising the growing need for co-working spaces, the government has introduced a special financial scheme, offering MSME and startup entrepreneurs loans of up to ₹10 crore at a 5% interest rate to establish co-working facilities on their own land. Companies fulfilling job-creation criteria within two years may even receive partial interest waivers. The Kerala Financial Corporation (KFC) has been allocated ₹10 crore for this initiative.
Kerala’s fintech sector has also received a boost, with ₹10 crore earmarked for the development of projects integrating AI, blockchain, cloud computing, and other emerging technologies. Financial institutions like KSFE and KFC will be actively involved in shaping the state’s fintech ecosystem.
Meanwhile, the formulation of Kerala’s new IT policy is in its final stages. To ensure its effective implementation, the budget allocates an additional ₹20 crore over last year’s allotment.
(Edited by Majnu Babu).
