Kerala Budget raises allocation for Industries sector, positions State as a hub for critical minerals

The Budget proposals for the industries sector aims to build on recent gains owing to change in government policies. One of the major proposals in the sector is for a ‘Rare Earth Corridor’ connecting Vizhinjam port to Chavara and further to Kochi. A centre related to this will be established adjacent to Kerala Minerals and Metals (KMML) Chavara, with an aim to project the State as a magnet hub. An amount of ₹100 crore has been earmarked for establishing a Rare Earth Critical Minerals Mission.

The State government is also planning to establish a Defence Technology Innovation Hub interlinking various institutions in the defence field. For the development of a Defence Research Development corridor, an amount of ₹50 crore has been earmarked.

The industries sector gets an increased total allocation of ₹1,417.26 crore, up by ₹122.54 crore compared to the previous year.

Finance Minister K.N. Balagopal spoke at length about the improvement in the State’s investment climate and the steps that led to the State topping the ‘Ease of Doing Business’ rankings.

He said that in the last five years of growth in the sector, 3.92 lakh new enterprises were established in the State. Kerala received a total investment of ₹22,000 crore, through which 7.5 lakh employment opportunities were generated, he said.

An amount of ₹35 crore has been earmarked for expanding and improving the ‘Mission 1000’ scheme to upgrade micro enterprises to small enterprises and small to medium enterprises. An amount of ₹4 crore has been allocated for a new scheme ‘Mission 1,00,000’ which aims to upgrade 1,00,000 nano and micro enterprises by providing financial and technical support so that each enterprise reaches a minimum annual turnover of ₹1 crore.

For value addition in the rural areas, the Budget proposes rural apparel parks and rural electronic assembling parks in collaboration with local bodies, with an allocation of ₹10 crore for setting up two parks in the first year.

Considering the increased demand for the Entrepreneur Support Scheme (ESS), under which an amount of ₹203.56 crores has been disbursed as capital assistance to 3,431 entrepreneurs in the last four years, an amount of ₹110 crore has been earmarked this year. In addition to the 38 private industrial parks already allocated, the government plans to introduce pravasi industrial park, women industrial park and traditional industrial park.

The government will establish Kerala University for Skill Development and Entrepreneurship through a PPP model to mould graduates who are equipped to meet the industrial demands of the State. An amount of ₹39.45 crore has been earmarked for infrastructure development of the small-scale industries sector. An amount of ₹ 17.06 crore has been earmarked to the promotional activities for establishing nano enterprises within the State by providing margin money grants to loan linked projects of the entrepreneurs. An amount of ₹63 crore has been set aside for Special Package Scheme for Micro, Small and Medium Enterprises.

Mr. Balagopal stated that the number of PSUs achieving operational profit rose from 12 in 2021-22 to 22 in 2024-25, with ₹294.60 crore allocated for the Comprehensive Economic Restructuring Plan to revamp PSUs.