Thiruvananthapuram: Kerala Finance Minister KN Balagopal, while presenting the state budget for 2025-26 on Friday, announced a significant tax hike on private vehicles older than 15 years. The government has increased the tax on such vehicles by 50% to discourage their continued use and promote vehicle scrappage.

Despite the introduction of the central government’s vehicle scrappage policy, private vehicles older than 15 years were not included under its mandatory provisions. To curb the use of outdated and potentially polluting vehicles, the state has now implemented this tax revision.

The government expects to generate an additional annual revenue of ₹55 crore from this hike, contributing to the total annual revenue of ₹110 crore from private vehicle taxes. The increased tax will apply to motorbikes, private three-wheelers, and private cars that are over 15 years old.

Presenting the second Pinarayi Vijayan-led government's fifth budget in the Legislative Assembly, Balagopal announced a Rs 750 crore project for the rehabilitation of the Wayanad landslides victims.

During his address, the minister also said that despite the financial crisis faced by the state, it carried out all social welfare schemes and development projects.

Balagopal said that the government has spent Rs 3,820 crore on scholarships for students belonging to minority communities and Scheduled Castes/Scheduled Tribes.

He further said that the Thiruvananthapuram metro project work will start this year.

Additionally, the Finance Minister announced that the final installment of Rs 600 crore for the revision arrears of service pensions will be paid this month.