The Kerala Budget 2025-26, presented by Finance Minister K N Balagopal, highlights startups and entrepreneurship as essential components for economic development.
With Rs 517.64 crore allocated for the IT sector, the budget outlines measures to support innovation and technology-driven enterprises.
A major proposal is the establishment of Global Capability Centres to foster opportunities for startups in areas like research and development, advanced analytics, and digital transformation. The budget allocates Rs 5 crore for setting up GCC parks, including infrastructure development and feasibility studies. An additional Rs 2 crore has been earmarked for hosting an international GCC conclave.
Kerala Startup Mission (KSUM) CEO Anoop Ambika commented on the proposals, stating, "The budget proposals align well with the state’s transition into a knowledge-based economy, a remarkable journey in which the innovation ecosystem is expected to contribute immensely." He highlighted that GCCs would present challenging opportunities for tech-driven startups to capitalise on areas like research and development, product management, and digital transformation.
Recognising the potential of the fintech industry, Rs 10 crore has been designated to support its development. Emerging technologies such as AI, blockchain, and cloud computing are expected to drive this sector forward. Projects involving financial institutions like KSFE and KFC will also be formulated.
To encourage entrepreneurship, loans up to Rs 10 crore at a 5% interest rate will be offered to MSME and startup entrepreneurs for establishing co-working spaces, subject to conditions. Additionally, Rs 10 crore has been allocated to Kerala Financial Corporation for interest subvention.
The budget includes key initiatives such as Rs 1 crore for AI startup ventures, Rs 10 crore for the fund-of-funds scheme under Kerala Startup Mission, Rs 10 crore for setting up Graphics Processing Units clusters, Rs 5 crore for the Emerging Technology Hub at Technocity in Thiruvananthapuram, Rs 2 crore for the Freedom Square project, and Rs 1 crore for conducting an Agentic Hackathon.
The ‘New Innings’ project, aimed at encouraging elderly individuals to start businesses, has allocated Rs 5 crore. Another Rs 5 crore has been allocated for establishing toy manufacturing units as MSMEs, with support from Kudumbashree.
The Young Entrepreneurship Programme across the state has been allocated Rs 90.52 crore, reaffirming the government’s commitment to nurturing innovation and enterprise. Established in 2006, the Kerala Startup Mission continues to lead entrepreneurship development and incubation activities in Kerala.
Substantial allocations have been made for IT infrastructure, including Rs 293.22 crore for establishing an IT park in Kannur, Rs 25.81 crore for Kerala Digital University operations, Rs 21 crore for Thiruvananthapuram Technopark, Rs 21.6 crore for Kochi Infopark, and Rs 11.5 crore for Kozhikode IT Park.
To drive comprehensive development, Rs 500 crore has been allocated for implementing projects under the Nava Kerala initiative, offering additional avenues for entrepreneurial growth.
