Thiruvananthapuram: Kerala Finance Minister KN Balagopal, while presenting the Kerala Budget 2025 on Friday, stated that the state has overcome the financial crunch experienced in the last financial year.  

As part of the budget proposals, Rs 600 crore in arrears for service pensioners will be disbursed in February.  Additionally, Dearness Allowance (DA) arrears will be provided in two instalments by March 2025 and merged with the Provident Fund.

The Finance Minister also announced that state government employees will get a 2% reduction in home loan interest.

Pension and pay revision arrears
The final instalment of service pension revision arrears amounting to Rs 600 crore will be disbursed in February. 

Two instalments of pay revision arrears will be sanctioned during the current financial year and will be merged with PF accounts. 

The lock-in period for two instalments of DA arrears will be waived off, allowing employees to access their dues immediately. 

Social Security Pension
The remaining three instalments of Social Security Pension arrears will be disbursed in 2025-26, Balagopal said. The Finance Minister also said that Kerala provides the largest Social Security Pension in India, spending over Rs 11,000 crore annually.  Around 60 lakh beneficiaries receive Rs 1,600 per month under this scheme. The state has already disbursed Rs 33,210.68 crore, with the Centre contributing only 2% of the total requirement. 

Employee benefits 

• Priority Counters will be set up at all sub-treasuries in a phased manner to assist pensioners and avoid long queues. 
• The house building advance scheme for government employees will be revamped, with a 2% interest subsidy for loans taken from banks or financial institutions. The government has allocated Rs 50 crore for this scheme. 
• Daily wage and contract employees will get a 5% wage hike. 
• An instalment of DA/DR for government employees and pensioners will be provided, with the revised DA/DR rates effective from April 2025.