Tourism sector to receive an allocation of ₹385.02 crore, marking an increase of ₹33 crore from the previous budget; ₹80 crore set aside for international marketing and promotion.
Published Feb 08, 2025 | 12:48 AM ⚊ Updated Feb 08, 2025 | 12:48 AM
Along with tourism, the urban development sector was emphasized multiple times in the budget.
Synopsis: 70 percent of the state’s population is expected to reside in cities by 2031. Kerala is among the fastest urbanising states in the country, and the budget proposes to encourage more high-rise apartments, even as it makes provision for using the large number of empty houses in the state for tourism promotion
One of the most striking announcements in the Kerala Budget 2025-26 presented by Finance Minister K.N. Balagopal on 7 February is the introduction of K-Home, a groundbreaking initiative to transform vacant houses in the state into tourist accommodations.
The scheme to transform unoccupied houses in the state (Census 2011 showed that over 11 lakh houses in the state had no occupants) will be piloted around tourist destinations like Fort Kochi, Kumarakom, Kovalam and Munnar. Houses within a radius of 10 km of the tourist sites will be chosen in the pilot project.
K-Home is an initiative to enhance tourism infrastructure by utilising unoccupied houses and turning them into revenue-generating assets, while also ensuring their maintenance and security.
The state government proposes to earmark ₹5 crore in the budget towards this initiative for sustainable tourism and property utilisation.
In his introductory remarks, Balagopal noted that Kerala is among the fastest urbanising states in the country. Urban areas are poised to become key drivers of the state’s development.
Recognising the critical need for high-quality accommodation and modern convention facilities to attract global tourists, the Kerala government has introduced a new initiative to encourage hotel investment.
As part of its strategy to strengthen Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism, the state plans to develop large-scale convention and tourism centers.
The Kerala Financial Corporation (KFC) will introduce loan schemes of up to ₹50 crore for hotel construction, with ₹20 crore allocated for interest subsidies.
The renowned Kochi-Muziris Biennale, which has significantly elevated Kerala’s presence on the global cultural stage, will receive ₹7 crore for its 2025-26 edition.
For the 2025-26 fiscal year, the tourism sector will receive an allocation of ₹385.02 crore, marking an increase of ₹33 crore from the previous budget. A sum of ₹80 crore has been set aside for international marketing and promotions to enhance Kerala’s global tourism appeal.
Under Ude Desh Ka Aam Nagrik (UDAN), ₹20 crore has been allocated to boost tourism connectivity through seaplanes, heliports, and airstrips, while ₹50 crore is set aside for seaplane aerodromes and small aircraft landing sites — Kerala’s largest-ever outlay for the project despite its turbulent history.
The government has also unveiled the ‘Loka Kerala Kendram’ (Global Kerala Centre) initiative to strengthen ties with the Malayali diaspora, offering incentives for promoting Kerala tourism.
With the anticipated completion of the ambitious Kovalam-Bekal Inland Waterway project in 2026, the state aims to leverage its extensive canal networks for tourism and logistics.
The government plans to acquire 15.115 hectares along the Akkulam-Kollam stretch of the West Coast Canal for developing five specialised zones — an agro-tourism hub, a diversified tourism and allied activities zone, an integrated fish park, a backwater tourism area, and a boat manufacturing and repair facility.
Additionally, 181 acres of land across 68 parcels along the upcoming coastal highway will be acquired for constructing beach promenades, cycling tracks, tourist amenities, walking paths, and EV charging stations, further cementing Kerala’s status as a premier tourism destination.
The budget has also earmarked substantial funds to enhance pilgrim tourism and cultural heritage sites. ₹5 crore is set aside for the construction of a Pilgrim House and Amenity Centre near the Mahaganapathy Temple in Kottarakkara.
Another ₹2 crore will be utilised for building the main pavilion at the Aranmula Boat Race.
To improve connectivity between key pilgrim destinations, ₹3 crore will be allocated for upgrading amenities at Kozhanchery, linking the Aranmula Boat Race with the Maraman Convention, a spiritual gathering on the banks of the Pampa River.
Furthermore, ₹5 crore has been assigned for establishing a Hajj House in Kannur, while an additional ₹20 crore will be directed towards enhancing facilities at various prominent pilgrim centers across the state.
Balagopal stated that Kerala’s urban landscape is transforming at an unprecedented pace.
In 2001, only 25.96% of the state’s population lived in urban areas; that surged to 47.72% by 2011.
Projections indicate that by 2031, over 70% of Kerala’s population will reside in cities.
Recognising the need for planned urban expansion, the state has established India’s first Urban Commission to address unique challenges faced by urban areas.
The recommendations of this commission will guide future policies, with Metropolitan Planning Committees being set up for the development of Kochi, Thiruvananthapuram, and Kozhikode.
The Kochi-Sustainable Urban Restructuring Project aims to revamp 210 hectares of the city’s urban spaces (excluding the island area) with private sector participation.
Inspired by successful housing projects in Delhi, Mumbai, and Kolkata, Kerala will promote the construction of high-rise apartment complexes and residential clusters, ensuring efficient land use and improved living conditions.
The Kerala government has earmarked ₹1986.32 crore for various urban development initiatives, an increase of ₹58.88 crore from the previous year.
The Ayyankali Urban Employment Guarantee Scheme has been allocated ₹180 crore, intending to create 60 lakh person-days of employment.
Investments in urban waste management under the Suchitwa Kerala project (₹20 crore) and the Deen Dayal Antyodaya Yojana — National Urban Livelihood Mission (₹23 crore state share, ₹34.50 crore expected from the Centre) will support sustainable urban living.
Kerala has committed ₹30 crore as the state share for the Pradhan Mantri Awas Yojna (PMAY)-Urban housing scheme, with an anticipated ₹90 crore from the central government.
The government is also contributing ₹10.36 crore towards PMAY Urban 2.0, with ₹15.54 crore expected from the Centre, and ₹30 crore towards Swachh Bharat Mission (Urban 2.0), with a projected central share of ₹45 crore.
The state government remains committed to strengthening metro connectivity. While Kochi Metro’s expansion will continue, plans are in place to develop metro rail systems in Thiruvananthapuram and Kozhikode.
Preliminary work for the Thiruvananthapuram Metro is expected to commence in the 2025-26 financial year, marking a significant step towards enhanced urban mobility in Kerala.
The Kochi Metro Rail Project will receive ₹289 crore in the 2025-26 financial year, with action already initiated for planning Phase II.
Additionally, ₹159.60 crore has been allocated as the Emergency Action Plan (EAP) component for the Integrated Water Transport in Kochi.
(Edited by Rosamma Thomas)
