Kerala Cabinet Sanctions Additional 105.26 Acres for Palakkad Industrial Smart City

What the Cabinet decided

The Kerala Cabinet has sanctioned the allocation of 105.26 acres of land in Puthussery village, Palakkad, for the development of an Industrial Smart City. The land is to be transferred to the Kerala Industrial Corridor Development Corporation (KICDC), the designated Special Purpose Vehicle for the project, and the allocation is described as Kerala's contribution to a joint venture with the Central Government to build the industrial hub.

Alongside the land sanction, the Cabinet's note recorded that the master plan, environmental clearances and Detailed Project Report (DPR) for the Smart City had been approved, with tender processes for infrastructure works set to begin.

Context: the site visit and run-up to the decision

A central government delegation visited the Palakkad site in October 2024 for discussions with state officials and KICDC representatives to speed up implementation. Industries Minister P. Rajeev stated at the time that the ongoing land acquisition process was likely to be completed within a month, with the State providing land while the Union government would oversee infrastructure development.

This December 2024 sanction followed the Union Cabinet Committee on Economic Affairs (CCEA) clearance for the Palakkad node in mid-2024, part of a national package of 12 industrial smart cities. Earlier milestones on record include the National Industrial Corridor Development and Implementation Trust (NICDIT) Board's approval of the project in December 2022 and environmental clearance from the Ministry of Environment, Forests and Climate Change in February 2024. The state had already acquired 82% of the required land by 2022.

How this fits the overall project area

The Palakkad Node covers approximately 1,710 acres across three land parcels — Pudussery Central, Pudussery West and Kannambra — located roughly 20 km from Palakkad city, 150 km from Kochi and 50 km from Coimbatore. The node carries a stated project cost of ₹3,806 crore, an investment potential of ₹8,729 crore, and an expected employment generation of around 51,000 jobs.

The Smart City is envisaged to host a mix of industries including medicinal chemicals, botanical products, non-metallic mineral products, rubber and plastic products, high-tech industries, and machinery manufacturing. Within the approved land-use plan, industrial use accounts for 672.7 acres (59.16%), split further into 420 acres for pharmaceuticals, 96.5 acres for high-tech industries, 42.3 acres for non-metallic minerals, 54.3 acres for textiles, and 59.6 acres for recycling, with 40.38 acres set aside for roads and smaller portions for residential, commercial and essential services.

The SPV structure and funding route

KICDC is a special purpose vehicle formed jointly by NICDIT and the Government of Kerala, with the two holding equal equity stakes. The state's contribution is routed through the Kerala Infrastructure Investment Fund Board (KIIFB), which has funded land acquisition, while the Centre's share funds infrastructure development, released in tranches tied to land handovers.

Practical effect: what followed the December 2024 sanction

The December 2024 Cabinet sanction fed into the first tranche of equity transferred to the SPV that same month — 110 acres of land from the state and ₹104.5 crore from the Centre. A second tranche followed in March 2025, comprising a further 220 acres of land from KINFRA as state equity and ₹209 crore from the Centre.

By May 2025, KINFRA confirmed that the master plan and DPR were complete, and tenders worth an estimated ₹1,100 crore had been invited for a first-phase Engineering, Procurement and Construction (EPC) package covering internal roads, drainage, bridges, water supply, firefighting systems, wastewater recycling, a sewage treatment plant and power distribution across roughly 1,400 acres of already-acquired land in Puthussery Central and Kannambra, targeted for completion within four years.

KICDC has since indicated it will execute the Smart City's infrastructure in a single consolidated phase rather than staggered phases, aiming to complete works within 42 months before allotting parcels to industrial occupants, with land transfer to the SPV continuing in phases based on fund availability even as the infrastructure contract covers the already-acquired land.

Status note

As of the December 2024 Cabinet sanction, this was a land-allocation decision transferring state land to the project SPV — it was not, by itself, a notification of completed construction or plot allotment to industries. Subsequent land and equity tranches (March 2025) and the infrastructure tendering (May 2025) represent later, separate administrative steps building on this sanction; readers should treat each as a distinct, date-stamped milestone rather than assume the smart city is operational.