During her one-hour-15-minute speech, not once did Finance Minister Nirmala Sitharaman mention Kerala. But neither were Gujarat, Uttar Pradesh, Madhya Pradesh nor even Andhra Pradesh. 

Just because none of the pre-budget demands Kerala had raised found a mention in the Budget does not mean the state has been ignored. Take the unprecedented personal income tax reliefs offered in the Budget. With salaried workers forming nearly 40% of the total work force, nearly double the national average of 23%, Kerala is perhaps one of the biggest beneficiaries.

There is yet another announcement that should cheer Kerala up. The allocation of Rs 20,000 crore to stimulate research, development and innovation in the private sector. The Centre's Department of Promotion of Industry and Internal Trade (DPIIT) has already identified Kerala as having the best startup ecosystem in the country. This means, no state is better placed than Kerala to corner a decisive chunk of this Rs 20,000 crore.

'Tourism for employment-led growth' is another budget prescription that should electrify policy planners in Kerala. The proposal says that top 50 tourist destination sites in the country will be developed in partnership with states through what has been called a "a challenge mode". 

There will be stiff competition and it will be up to the Kerala government to come up with compelling employment-generating tourism projects. Sitharaman’s only condition is that the states should provide the land for the creation of critical tourism infrastructure like hotels and convention centres. 

Kerala seems ready as its Tourism Department has enough parcels of land at its disposal.

Here is one more. Sitharaman said that additional infrastructure will be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students. The Palakkad IIT started functioning only in 2015.

Kerala's avant-garde burden
While there are budget proposals that are beneficial, there are others that will not be of much use to Kerala for the simple reason that the state is ahead of its time. 

Take for instance, the proposal to provide broadband connectivity to all government secondary schools and primary health centres in rural areas or the one to set up Atal Tinkering labs in government schools in the next five years. 

The implementation of both these projects is at an advanced stage in Kerala; the state's higher secondary schools had internet connectivity since 2007, and in 2022 Kerala's first tinkering lab was inaugurated at Vocational Higher Secondary School, Kottankulangara, Kollam. 

Wayanad betrayal
It was Sitharaman's refusal to speak a word about landslide-hit Wayanad that had apparently infuriated Kerala finance minister K N Balagopal the most.

"Forget the special package, what can be said of a people who could not even bother with Wayanad," Balagopal told reporters after the Budget presentation on Saturday, February 1.

Not only was Wayanad left out from the Budget Speech but the ravaged district could not be located even in the 350-page Expenditure Budget that was tabled along with the Budget Speech and contains the capital and revenue expenditure details of all individual ministries and departments. 

But this was not Wayanad's fate alone. It was Assam's and Andhra Pradesh's, too; Cyclone Fengal had decimated Assam and claimed 117 lives in July and floods in AP's Vijayawada had claimed at least 45 lives in August. Like Wayanad, Assam and Vijayawada were also not featured in the speech as well as the Expenditure Budget.

However, a closer reading of the fine print (Expenditure Budget) would reveal that the Centre had increased the allocation under 'assistance to states from National Disaster Response Fund (NDRF)'. From Rs 11,474 crore this 2024-25 fiscal it has been increased to Rs 12,048 crore for 2025-26. The landslide victims of Mundakkai and Chooralmala are also entitled to a share of this amount.

Vizhinjam trust gap
A Rs-5000-cr special package for Vizhinjam International Seaport was another demand that went unheeded. It can be argued that other key ports under development - Vadhavan Port in Maharashtra and Ramayapatnam Port in Andhra Pradesh - have also not been mentioned. 

However, in Vizhinjam's case the injustice runs deeper. Leave aside the special package, Sitharaman has brushed aside even the request to retain the centre's portion of viability fund gap (VGF) as a grant; the Centre now insists that the VGF is a loan and wants Kerala to repay it with interest. 

Finally, a thumbs up
Nonetheless, it is not as if all of Kerala's demands were junked. Kerala had requested that additional borrowing of 0.5% of GSDP linked to power sector reforms be extended to 2025-26. This has been accepted.