Thiruvananthapuram: In his budget for 2025-26, Finance Minister K N Balagopal emphasised on technology, research, jobs, and education, positioning the state as a knowledge powerhouse. Here are key allocations and initiatives that could fuel the state's knowledge economy vision.

Technology & AI
* Rs 10 crore for establishing a world-class GPU cluster in Thiruvananthapuram to develop AI and AVGC (Animation, Visual Effects, Gaming, and Comics) industries.

Unlike a CPU (Central Processing Unit), optimised for sequential tasks, a GPU (Graphics Processing Unit) excels at parallel processing, making it ideal for tasks like deep learning, AI model training, and video rendering.

*Rs 1 crore was allocated for a national-level Agentic AI hackathon, funding five selected AI projects.

Agentic AI systems operate autonomously, make decisions, and take actions with minimal human intervention. These AI models go beyond passive data processing and are designed to reason, plan, adapt, and achieve specific goals in dynamic environments.

*Rs 2 crore to set up 'Freedom Square' innovation hubs in all 14 districts to encourage interdisciplinary collaboration. Freedom Square, a startup ecosystem promoted by the Kerala Startup Mission, serves as an open innovation hub for entrepreneurs, students, and researchers.

IT & Digital Infrastructure
Finance Minister promised Rs 293.22 crore from the Kerala Infrastructure Investment Fund Board (KIIFB) to build a 5-lakh square foot IT park near Kannur Airport.

IT parks are planned in Kollam and Kottarakkara, too, with a seed fund of Rs 1,000 crore.

The Kollam IT Park is to be built on land owned by the Kollam Corporation through a tripartite agreement between KIIFB, KINFRA and Kollam Corporation. The first phase is expected to be completed by 2025-26.

In Kottarakkara, the IT Park with a built-up area of 97,370 sq ft and will be established in Ravi Nagar.on Kallada Irrigation Project's campus. 

These pilot schems will serve as models for other revenue-generating projects using unused lands of the government, PSUs, and local self-government institutions (LSGIs).

The finance minister has earmarked Rs 1,000 crore as a seed fund or initial capital to LSGIs to help them raise funds via municipal bonds for such revenue-generating IT projects. The government intends to use the success of these projects to launch 100 new infrastructure projects over the next two years.

The finance minister has set aside Rs Rs 212 crore for establishing a permanent Digital Science Park in Thiruvananthapuram.

Research & Higher Education
The finance minister has set aside Rs 69 crore to set up a Centre of Excellence on Neurodegeneration and Brain Health at CUSAT and another Rs 62 crore for a Centre of Excellence in Nanoscience and Nanotechnology at MG University.

The government has earmarked Rs 25 crore for seven new Centres of Excellence, including the Kerala Institute for Science, Technology, and Innovation.

The four centres of excellence under the Science and Technology Department – Kerala School of Mathematics, Institute for Climate Change Studies, Centre of Excellence in Nutraceuticals, and Centre for Excellence in Microbiome will be strengthened to improve the state’s research capabilities and evolve novel ideas, said the finance minister in his budget. Over the next five years, the government would spend Rs 25.35 crore, Rs 18.62 crore, Rs 14 crore, and Rs 16.57 crore, respectively, on these four institutions, he said.

Job Creation and Skill Development
'Vijnana Keralam' campaign will provide skill training to 5 lakh final-year students in various courses and facilitate employment, Balagopal said.

Vijnana Keralam is a people’s campaign and it will mentor those who have completed studies and provide jobs through job fairs, he said. "This will be a major development project in 2025-26," the minister said in his speech.

He has earmarked Rs 20 crore for job fairs and skill training. "The first mega job expo for job aspirants who have completed their studies will be held in February 2025," he said.

Regional job drives and two mega job expos will be conducted every month, starting in April. "Three to 5 lakh employment opportunities will be offered in each mega job expo," he said. Job aspirants would have to register on the Digital Workforce Management System (DWMS) of the Kerala Knowledge Economy Mission can apply for jobs. Job stations have been set up in every block and municipality to facilitate them, he said.

The finance minister has also set aside Rs 10 crore to help 'Expand Your Office' (EYO) for MSMEs/startups to set up coworking spaces.

Fintech & Innovation
Rs 10 crore has been allocated to develop the fintech sector, integrating AI, blockchain, and cloud computing with financial services. Projects will be formulated by bringing together financial institutions such as KSFE, and KFC in these activities, he said.

Green Technology & Sustainability
The government is betting on environment-friendly hydrogen fuel to reduce the dependence on fossil fuels. The minister said there is a conducive environment for hydrogen production in our state due to the abundance of sunlight and water resources. Using these resources, a large-scale Hydrogen Valley project will be piloted in the State. Rs 5 crore has been set aside for the first phase to be developed in Public-Private Partnership (PPP) mode.  "For implementing this, a separate company will be set up," Balagopal said.

The government also set aside Rs 10 crore as initial funding for bio-ethanol research to reduce fossil fuel dependency.

The country has a fuel policy to blend 25% of ethanol in petrol and other fuels and Kerala would require ethanol worth Rs 6,000 to Rs 10,000 crore per year in the future, he said. "If this requirement can be met domestically within the State, it would be highly remunerative for our farmers. It will also rejuvenate the agricultural sector of the State," he said, explaining his thrust on bio-ethanol research.