Kerala Budget 2019

Thomas Isaac, the Finance Minister of Kerala, presented the Kerala Budget 2019-20 with the hope and faith to not just rebuild God's Own Country, but to build a new Kerala from the aftermath of the catastrophic Kerala floods and the Sabarimala chaos. Post the twin calamities, this southern state of India has been in a severe financial crunch. However, the State's economy has been on a path of growth as stated in the Economic Survey presented during the Assembly. Kerala Budget 2019 is an expansive annual budget that covers a broad range of sectors with particular emphasis on rebuilding the State and generating non-tax revenues to bring Kerala back to its former glory.

Highlights of the Budget

The following are the highlights of the Kerala Budget 2019 presented a day before the Union Interim Budget 2019. The total outlay of the Kerala Budget 2019 is INR 1.42 Lakh Crores with the inclusion of around 1,200 Schemes and 25 new projects aimed to bring about a significant influence in the future of the State.

Restoration after the Floods

The following are the highlights mentioned in Kerala Budget 2019 concerning the Kerala Floods of 2018.

The budget promises that the contribution received for the Kerala Chief Minister's Disaster Relief Fund, which is a total of INR 3229 Crores, would be used only for the works related to the flood.
INR 1832 Crores were spent on the reconstruction of Kerala post the floods. This amount has not only been used for the restoration of property, but for the livelihood that was affected due to the same. A loss of INR 15,000 Crores has been accounted to the revenues of villagers as a result of the floods.
An amount of INR 250 Crores has been allocated for local bodies that were affected by the flood.
For the Panchayats that had to face the fury of the floods, an amount of INR 250 has been allotted.
As a part of the initiative to rebuild Kerala, INR 1000 Crores have been allotted for coastal rehabilitation. This comes as a relief to the fishing community as they are the first to be affected by any climate changes. INR 1000 Crores has been allotted for the sole reason to rehabilitate fisherfolk in the state of Kerala.
A staggering budget of INR 2500 Crores has been granted for the Agricultural Sector to recover and rebuild from the aftermath of the floods. Along with this, INR 20 Crores have been allocated for crop insurance alone.

Projects to build Nava Kerala (New Kerala)

With the objective to build a Nava Kerala (New Kerala) and to bring back what the state lost in the floods, 25 new projects have been planned. Each of these projects would be implemented as joint programmes forming a comprehensive rebuilding scheme.

Startups: INR 10 Crores has been allocated for the formulation of a startup accelerator programme as a part of the Innovation Zone.
Industrial Parks and Corporate Investments: An amount of INR 15,600 Crores has been sanctioned from the KIIFB for obtaining 6,700 acres of land and for Industrial Parks around Kannur Airport. This has been planned to bring about a massive Industrial Complex to be constructed on the outskirts of Kannur Airport.
Integrated Rice and Rubber Parks: INR 20 Crores have been set apart specifically for rice parks in the state. The outlay for the cultivation of Paddy in itself is INR 91 Crores.
Malabar Coffee and Carbon Neutral Wayanad: A project aimed at selling coffee powder of Wayanad under Kerala's brand called Malabar.
Production of Coconuts: A project with a budget of INR 70 Crores aimed at increasing the production of coconuts in the state and increasing their prices.
Kuttanad Package: A project driven towards rebuilding Kuttanad from the ruins caused by the Kerala Floods. An amount of INR 1000 Crores has been allocated for the same cause.
River Rejuvenation and Watershed Development: An amount of 25 Crores has been allocated for River Rejuvenation and Watershed Development.
Coastal Rehabilitation and Restoration: An amount of INR 1000 Crores have been sanctioned for the development and upbringing of Coastal regions.
Universal Health Security Scheme: This project is aimed towards the enhancement of support for the poor and to include many more people under the same project.
Educational Project: An amount of INR 170 Crores have been sanctioned for the expansion and improvement of infrastructural facilities in schools that have not received any financial aid from the KIIFB.
Housing for All: INR 1,296 Crores has been allocated for the construction of housing complexes explicitly aimed to the Homeless and Landless individuals and families.
Placements for Scheduled Communities: A scheme has been designed to offer placements and guarantees in employment to about 10,000 members of the Scheduled Communities in the organised sector.
Hunger-Free Kerala: INR 20 Crores has been sanctioned to obtain food and related materials from the Civil Supplies Corporation at subsidised rates.
Kudumbashree and Women Empowerment: INR 1000 Crores has been announced for the upbringing of Kudumbashree and INR 1420 Crores for schemes that are designed solely for the women in Kerala.
Kerala Bank: The most significant move for the state would be the formation of the Kerala Bank. The Reserve Bank of India had given the green signal for the bank formation in October of 2018.
NORKA Investment and Protection: The Non-Resident Keralites Affairs Department would bear all the expenses that occur to transport the bodies of Malayalees who pass away in Gulf countries, back home.
Coir replacing Wood: The production of Coconut fibre would be raised to 10 times in the next two years, production of Coir to 3 times, and the production of Coir products to 2 times.
Kerala Boat League: The project to begin a boat race every weekend in at least one centre in Kerala. This has been aimed to bring about a new tourism season in the State.
Spices Route and Heritage Projects: A project of an extensive manner has been undertaken by the Tourism Sector in Kerala to bring back all the trade routes and ports of Kerala.
Reconstruction of the West Coast Canal: Various bridges are to be reconstructed, and the construction of waterways in the state would be completed in 2022. This would include 585 Kilometres of the Bekal-Kovalam Waterway.
North-South Rail Track: An independent elevated double rail track linking the places in North Kerala to the ones in South Kerala over 515 Kilometres would be constructed.
Electric Vehicles: A project aimed at increasing the usage of Electric Vehicles within the State.
Roads: The construction and reconstruction of 6,000 kilometres of trails would be completed in the next two years.
Energy Mission: A project designed to enhance the generation of power and electricity in the State.
Public Sector Industries: A project aimed at increasing the number of profit-making PSUs to 20 by the end of the financial year. This would also bring about an increase in the turnover from INR 2,800 Crores to INR 3,800 Crores.

Infrastructure Plans throughout Kerala

The following are the highlights mentioned in Kerala Budget 2019 regarding Infrastructure that is planned to be built throughout the State.

The Budget supports the construction and upbringing of a string of townships in and around the major cities of Kerala.
In this year, the Budget claims to take land for Kochi Refinery and a hub for Industrial Parks to be set up.
A boat building yard is to be built in Kollam as part of this Budget.
A company set up on the model of Cochin International Airport Ltd (CIAL) to revive rubber and produce value-added rubber products.
INR 200 Crores have been allocated for the relaying coastal roads that were affected due to the floods.
A new seaport has been planned and designed to be constructed in Pozhiyoor.
INR 50 Crores have been sanctioned for the completion of the infrastructure related to fishing harbours.
For the maintenance and protection of the beaches in Kerala, INR 227 Crores worth of projects have been sanctioned and would be implemented this year.
INR 40 Crores have been sanctioned for the deepening and widening of the Thottappally spillway.
Townships related to the Amaravathy model would be set up in Kochi as a part of this Budget.
The Finance Minister has sanctioned INR 19 Crores for Kerala State Electronic Development Corporation Limited and INR 5 Crores for Transformers and Electricals Kerala.
In the course of the next two year, 6,000 Km of the road would be completed using modern technologies to design these roads. The new routes would follow the guidelines framed by the Indian Road Congress.
Mobile septage units would be set up in various places to reduce backwater pollution. Various steps would be taken to keep the backwaters of Kerala free of contamination.
To rebuild Kuttanad after the floods, INR 1000 Crores have been sanctioned for the New Kuttanad Package.
Mobile septage plants would be set up in Alappuzha. This would also comprise of implementing floating septage tanks that would deal with the boating sector in Alappuzha.
For the mega food parks by the Kerala Industrial Infrastructure Development Corporation, an amount of INR 250 Crores has been announced.
The districts of Alappuzha, Kollam, Ernakulam and Wayanad are to be given more consideration regarding budget allocation.
The waterways in Kerala would start to function next year as soon as the repairs are completed.
The Kerala Metro Rail Ltd has helped the state to be the first in the country to achieve a milestone where the water transport is integrated as a feeder service to the metro and is all set to initiate the integrated water transport project with the financial assistance from the German Bank, KfW.
The development of the Bekal to Kovalam waterway.
The construction of a new railway track would begin in the year 2020. This would comprise of trains that go at higher speeds than average and would connect North Kerala and South Kerala with a budget allocation of INR 55,000 Crores.
The Glass Factory in Alappuzha which had been halted since the past ten years would be transferred to the state government and would resume functioning by the year 2021.
For the development and construction of housing complexes in Kerala, a budget of INR 1296 Crores has been allocated in the Budget. The government has started the set up of an industrial zone near the airport in Kannur.
Sabarimala is to be developed into a Tirupati model. The Base Camp, Nilackal Pamba has been allotted a budget of INR 147.5 Crores while the roads in Sabarimala have been given a budget of INR 629 Crores for development.
A separate block would be constructed in the Hajj houses designed explicitly for women.
The Devaswom has been granted INR 100 Crores in the Budget.
A RoRo Service is to be initiated between Thavanakadavu and Vaikom.
The zoos in Kerala have been granted an amount of INR 32 Crores in the Budget.

The IT Sector

The following are the highlights mentioned in Kerala Budget 2019 concerning the Technology in Kerala.

For the development and encouragement of startups, an amount of INR 700 Crores has been announced as a part of the Budget.
Kerala proudly hosts the largest Startup ecosystem in the state as an integrated Startup Complex is being set up in Kochi.
An amount of INR 10 Crores has been announced for Kerala Technology Innovation Zone.
A staggering amount INR 141 Crores has been sanctioned for the Industrial Parks in the state.
With the belief that Tomorrow's world depends on Today's Startups, an amount of INR 70 Crores has been announced in the Budget for the development of the youth program of startups in Kerala.
Startup accelerator Airbus Bizlab incubator would be set up in Thiruvananthapuram with the aim to establish an aerospace-focused innovation centre.
The Budget is designed to bring various multinational companies and major corporates to set up in Kerala. As a part of this initiative, Tech Mahindra has rented out a space of 12,000 sq ft in the state and Nissan has set up a specialised centre in Thiruvananthapuram.
More than 2000 job opportunities have been created in Kozhikode Cyberpark.
The Budget looks forward to setting up an Industrial Area in association with Kannur International Airport.
The Budget promises to allocate 1.16 Lakh sq ft of space specifically for Information Technology would be created in the major cities of Kerala.
For the safety of fishers, satellite phones and GPS are to be provided within the budget of INR 15 Crores. This would include GPS facilities for fishing boats as well.
An amount INR 6375 Crores have been sanctioned for the establishment of transmission grids through the Kerala Infrastructure Investment Fund Board.
Kerala is all set to promote electric vehicles with a target to bring about more than 10 Lakh EVs by the year 2020.
KSRTC is prepared to roll out Electric Buses. Every KSRTC bus in the city of Trivandrum would be converted to EBs. To initiate this, discussions are on with a Swiss brand regarding the introduction of E-buses.
The Information Technology Sector in Kerala has been sanctioned a total of INR 574 Crores in this Budget. Out of this, a total amount of INR 84 Crores have been directed for IT parks in Kerala.
The Budget has specific outlays to boost the usage of solar energy. KIIFB is expected to fund the installation of solar panels on the rooftops of Government schools and hospitals.

The Agriculture Sector

The following are the highlights mentioned in Kerala Budget 2019 concerning the Agriculture Sector in the State.

The production of Coconut would be encouraged and considerably increased. An amount of INR 70 Crores has been announced for factories producing coconut-based products.
Wayanad has been chosen to be the prime area for Horticulture in an objective to promote the growth of flowers.
The Budget would support the production of Jackfruit based products and their manufacturing.
The collection of ripe coffee berries would be raised regarding price when compared to the market prices for the same along with the introduction of Malabar, a state government brand selling coffee from Wayanad.
The cities of Thrissur, Palakkad and Alappuzha are to have rice parks as a part of the Budget.
Bank loans would be granted for tree planting on a large scale.
INR 500 Crores has been announced to support the prices of rubber.
The Agricultural Board gets a budget of INR 30 Crores.
A budget of INR 41 Crores has been granted for the Kerala Agricultural University (KAU) in Thrissur and INR 45 Crores for Kerala University of Fisheries and Ocean Studies (KUFOS).

The Education Sector

The following are the highlights mentioned in Kerala Budget 2019 about the Education scenario in the state.

Government schools are being enabled with completely developed libraries and laboratories.
Various school workshops would be set up by the Government for vocational training of Higher Secondary school students. A budget of INR 15 Crores has been allocated for the same objective.
Training programs for teachers have been decided to be residential.
Cochin University of Science and Technology (CUSAT) has been given a budget of INR 25 Crores.
Kerala State Council for Science, Technology and Environment (KSCSTE) has been given INR 152 Crores as a part of the Budget.

The Health Sector

The following are the highlights mentioned in Kerala Budget 2019 about the Health Sector.

The revival of Taluk hospitals near the coastal areas has been included in the Budget. However, the renovation of hospitals is promised to be completed in the next financial year.
Quality generic medicines of a brand made by Kerala for Kerala would soon go into production.
Family community centres are to be promoted. Each family health centre would have the service of a minimum of 3 doctors. This is aimed to bring down the pressure on the secondary and tertiary hospitals.
Public Health Centres are to be converted into Family Health Centres. All families in the state of Kerala is to be covered under a health insurance scheme.
A comprehensive health program would be implemented in four major stages. INR 1000 Crores would be allotted for the same to the Kuttanad package and INR 100 Crores for the Nava Kerala Mission.
An amount INR 34.5 Crores have been granted to endosulfan victims.
Special Children have been granted INR 31 Crores in the Budget.
The Cochin Cancer Centre has been announced INR 15 Crores in the Budget.
The Malabar Cancer Centre has been given a budget of INR 35 Crores.
An amount of INR 788 Crores has been allocated just for the sole purpose of modernising hospitals in the state.

Trade & other Sectors

The following are the highlights mentioned in Kerala Budget 2019 concerning the Trade in the State.

INR 25 Crores have been announced for the Malabar Spinning Mill.
The Pravasi Chitty Collection specifically designed for Keralites working or would be invested in the Kerala Infrastructure Investment Fund Board (KIIFB).
The manufacturing of tribal food products is to be initiated this year.
The production of Coir is to be increased to almost ten times in the next two years. With the technology provided by a University in the Netherlands, coir fibre and pith could be used to create products that resemble wood.
The old ports of Kerala linking to Europe would be reconnected, and a spice route along the lines of the Silk Route of China would be developed.
Under the initiative to rebuild Kerala, Geo-textiles would be promoted.
The tourism sector has been given a budget of INR 82 Crores for marketing purposes.
For the development of Handicrafts in the state, a budget of INR 3.5 Crores has been allocated.
The Khadi sector has been granted a budget of INR 14 Crores.
A budget of INR 170 Crores has been sanctioned for the handloom industry.
Specially designed assistance has been given to traders in the budget.
An amount of INR 131 Crores has been granted towards coastal shipping and inland navigation.
The State Film Development Corporation has been granted an amount of INR 8 Crores in the Budget.
The Budget would create 195 various job opportunities or posts for engineers in local bodies.

Schemes and Subsidies

The following are the highlights mentioned in Kerala Budget 2019 about the introduction of new schemes in the state.

An amount of INR 2 Crores has been allocated for the revival of women empowerment schemes.
As a part of restoring Kerala post the floods, 1200 schemes have been planned. A few of these schemes have already helped in the complete rehabilitation of the people who were affected by the floods.
A scheme offering guarantee of employment has been declared, and an amount of INR 250 Crores have been allocated for the same.
For Ayyankali Urban Employment Government Schemes, an amount of INR 75 Crores has been announced as part of the Budget.
A brand new scheme specifically for land acquisition would soon be formulated, designed and implemented.
A subsidy specifically designed for fisherwomen that would set up kiosks in around the city of Trivandrum.
Loans that are interest-free for women who work in the fish markets in Trivandrum to help them open their kiosks.
The Keragramam Project would be allotted 45 Crores which would include the distribution of 10 Lakh coconut saplings under the same scheme.
The Budget has included 25% subsidy for the implementation of water recycling plants at hotels and marriage halls in and around Kerala.
Schemes would be created to double the income of farmers.
Subsidy for 1000 Electric Vehicles is to be introduced.
The income from the Kerala Lottery would be wholly utilised for the introduction of new health schemes.
The second phase of Mission Livelihood Inclusion and Financial Empowerment or Mission LIFE would be completed in March 2019, and the third phase for the mission would begin with a budget of INR 1290 Crores.
INR 25 Crores have been allocated for Non-Resident Indian Keralites who had to come back due to a loss of a job.
INR 7533 Crores have been sanctioned to be used for welfare pension purposes.
Individuals above the age of 65 are included in the Karunya Scheme.
Since 13% of Kerala's population comprises of individuals above the age of 60, a scheme has been launched to take care of them called as Sneha.
Forward Communities have been granted with a budget of INR 42 Crores.
A budget of INR 114 Crores has been sanctioned for the sole use for the welfare of backward communities.
The Budget also supports transgender individuals. An amount of INR 5 Crores has been directed to the Transgender community.
Pensions for differently-abled individuals have been given a budget of INR 500 Crores.
Minority Communities have been granted INR 49 Crores in the Budget.

Other major projects

The following are the other significant projects apart from the ones launched for Nava Kerala mentioned in Kerala Budget 2019.

The Drinking Water project has been given a budget of INR 250 Crores.
In the aim to promote energy efficient products, a particular campaign designed to achieve the same would be initiated in Kerala. As a part of this, old light bulbs would be taken back, and low efficient fans would be replaced. This would be called the Re-bulb Project and would be initiated along with schemes that keep a tab on the power consumption in Kerala.
The Thanneermukkam Bunds would be opened for a year to clean the water that is stored there.
A system would be developed and established where coconut farmers would receive their money through direct transfers to their bank accounts right when their produce is bought from their homes.
Geriatric care training would be provided to tribesmen with the help of 200 experts at the training.
INR 20 Crores have been allotted with the aim to make Kerala a hunger-free state. The agencies involved in the project have been ensured to give strategically designed subsidies.
The re-energising of Women Empowerment and the strengthening of the Kudumbashree project.
Non-Resident Keralites Affairs Department would bear the cost of transporting the bodies of the NRIs would expire outside the country.
The Muziris Heritage Project, a tourism venture by the Tourism Department of Kerala aimed at reinstating the cultural and historical significance of Muziris, would be completed by the year 2021.
Training of Scheduled Caste and Scheduled Tribes to achieve better placements with the involvement of Indian Institute of Management Kozhikode - IIMK and KEST Academy.
INR 208 Crores has been allocated for the protection of forests in the state along with various other projects.

Cess and Taxes

The people of Kerala will now have to pay a percent extra as flood disaster cess for all the items that fall under the 12%, 18% and 28% GST slabs for the two upcoming years as declared by the Finance Minister of Kerala. Taxes on Liquor would be increased, and there would be an increase in the prices of Gold and Silver while the service tax would go down for depositors. A hike in the charges for a movie ticket like in the Pre-GST Era would be imposed. The following are the details of the cesses that are in play along with the increase and decrease of various items.

Flood Cess

The states that face natural disaster may levy a disaster cess after the recommendation of the GST Council. The Council has given Kerala the yes to collect 1% cess on the supply of goods having a GST rate of 5% or lower. A flood cess at the rate of 0.25% would be levied on all the goods that fall under the 5th Schedule. This includes Gold, Silver and Platinum jewellery on the value of supply. 1% of flood cess would be imposed on the value of supply for the supply of goods under the GST bracket of 12%, 18% and 28% and all services. The period of flood cess would last for the next two years in Kerala.

Entertainment and Liquor

Before GST, local bodies had the authority to collect entertainment tax in the State. With the implementation of GST, this was bought to a stop. However, in states such as Tamil Nadu, both these taxes were collected. The GST Council has recommended the GST rate of cinema tickets were decreased from 28% to 18%. Now, the local bodies of Kerala would be permitted to impose 10% as entertainment tax on Cinema tickets. The tax rate on the initial sale of any foreign liquor which includes beer and wine would be increased by 2%.

GST

The following are the significant changes that would be made effective from the 1st of April, 2019.

A rise in threshold limit of registration for suppliers in goods from INR 20 Lakhs to INR 40 Lakhs.
For the supply of goods, the threshold for composition would be raised to INR 1.50 Crores and will be subject to levy of a compounded tax at 1%.
Service Providers with a turnover between INR 20 Lakhs to INR 50 Lakhs would be required to pay a compounded tax at a rate of 6%.

Vehicle Tax

The one-time tax on brand new motorcars, motorcycles and private service vehicles used for private purposes would be increased at a rate of 1%.
The additional fee levied for the delay in producing a fitness of transport vehicles and the cost for renewal of registration of non-transport vehicles by the Central Government would be removed. The new fee would be levied according to the Motor Vehicles Rules.

Luxury and Land

With the aim to reduce the price variation between the market value and the fair value of the lands in Kerala, the fair value in existence would be increased by 10%. The luxury tax rates for the residential building have been improvised and is as follows. This following tax would be levied as per the plinth area.

3,000 to 5,000 sq. ft. : INR 4,000
5,001 to 7,500 sq. ft. : INR 6,000
7,501 to 10,000 sq. ft. : INR 8,000
Above 10,000 sq. ft. : INR 10,000

A onetime building tax along with luxury tax would be imposed on completed buildings based on the plinth area recorded in the respective Plan Certificate presented to the Local Self Government. The necessity of affixing an INR 5 Court fee stamp on petitions and applications for the Revenue Department has been removed. A rate of 5% would increase the fee for many services of the Revenue Department. The revision fee for the Revenue Department would be increased from INR 10 to INR 20. A rate of 5% would increase most of the fee and charges for services provided by various departments of the Kerala Government.

Programmes around the State

The following are the highlights mentioned in Kerala Budget 2019 about the programmes planned throughout the State for the year 2019.

Programmes similar to the iconic Woman's Wall would be conducted in various districts throughout the state as a part of women empowerment.
INR 5 Crores have been allocated for the Pravasi festival.
The promotion of the Kerala Boat Race would be encouraged as a primary tourist attraction.
Districts in Kerala are instructed to conduct cultural events and functions in community centres with the aim to promote cultural activities.
An amount of INR 18 Crores has been directed to research related programmes such as "Walk with the Scholar" in various Universities.