Union Budget to be presented tomorrow; Kerala hopes for Rs 5,000 crore special package for Vizhinjam and Rs 2000 crore for Wayanad

KOCHI/THIRUVANANTHAPURAM: Rs 5,000 crore special package for Vizhinjam Port, Rs 2,000 crore for Wayanad rehabilitation. Kerala has high expectations from the Union Budget, which will be presented tomorrow. Reports suggest that the central government has collected details regarding the state's requirements. Measures to compensate for the Rs 12,000 crore shortfall in GST revenue are also expected. For Vizhinjam Port, the state anticipates interest-free long-term loans under the CAPEX scheme to improve rail and road connectivity. Additionally, Kerala expects Viability Gap Funding (VGF) for Vizhinjam and financial assistance not classified as a loan.

To overcome its financial crisis, Kerala hopes for a Rs 24,000 crore special package along with an increase in borrowing limits. This will be the second full-fledged budget of the third Narendra Modi government, presented by Finance Minister Nirmala Sitharaman in Parliament.

Increase in income tax exemption limits, schemes to boost middle-class income, initiatives to improve agricultural production and rationalization of GST rates are also likely to be announced in the budget. More allocations are expected for infrastructure development, welfare schemes, healthcare, and education sectors. There are also indications that a comprehensive package will be introduced for the manufacturing sector to overcome the slowdown in exports.

Income tax
Individuals with annual income up to Rs 5 lakh may be exempted from paying income tax, up from the current exemption limit of Rs 3 lakh. Additionally, the government may increase the income threshold for the 30% tax slab from Rs 15 lakh to Rs 20 lakh. The standard deduction for salaried individuals under the new scheme may increase from Rs 75,000 to Rs 1 lakh. Additional tax exemptions may be announced for investments in the National Pension Scheme (NPS), health and life insurance premiums, and housing loan interest. More tax relief for consumers in urban and rural areas to boost spending.

Kerala’s expectations:

1. Permission to borrow Rs 6,025 crore—equivalent to the amount spent on land acquisition for national highways.
2. Rs 300 crore for the rehabilitation and welfare of expats, increased funding for wage schemes and mid-day meals in schools.
3. Rs 1,000 crore for wildlife conflict prevention. More consideration for railway development and the long-awaited AIIMS project for Kerala.