Takeaways from Kerala Budget 2026

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The budget speech was held on 29th January by the Finance Minister of Kerala, K N Balagopal, in the Kerala Legislative Assembly. The Economic Review report was presented in the Assembly one day earlier on the 28th. This is Mr Balagopal’s sixth Budget after taking over as Kerala’s Finance Minister and will be the final budget of LDF 2.0 ahead of the Kerala elections 2026. 

Ernakulam leads Kerala districts in income chart, Pathanamthitta posts fastest growth as per the Economic Review. 

Major Announcements from the Budget Speech 

  1. GSDP rate- 2025-26 - 9.97% 
  2. GSDP- ₹6,85,28,316  crore
  3. Public Debt- ₹40,848.21 crore
  4. Revenue Deficit- ₹34,586.66 crore or 1.9%
  5. Annual Expenditure- ₹2,17,558.76 crore
  6. Fiscal Deficit- 3.2%
  7. Debt-GDP Ratio- 33.44%
  8. Kerala recorded a 6.19% real growth as per the economic survey. 
  9. 4th-longest budget speech in the assembly. 
  10. Wayanad Package- ₹50 crore.
  11. Finance Minister says the borrowing limit of the state has been reduced. 
  12. Read more at: https://www.onmanorama.com/news/kerala/2026/01/29/kerala-state-budget-today-minister-kn-balagopal-to-present-in-assembly-live.html
  13. ₹14,500 crore has been allocated to social welfare pensions. 
    • ₹1,000 per month for women who are not covered under other schemes, announced.
    • Elderly Budget Component introduced.
    • ₹3,507 crore for various welfare projects for SCs.
    • ₹1,012 crore for welfare projects for STs. 
    • ₹99.64 crore for the welfare of minority communities.
    • Gig Workers Welfare scheme. 
    • Assured Pension scheme ensures 50 per cent of basic pay as a pension for govt employees.
  14. ₹400 crore allocated to work scholarship scheme
    • The scheme provides ₹1,000 monthly financial assistance for up to a year to educated, unemployed youth aged 18-30. 
  15. Anganwadi workers to get a hike of ₹1,000 and ₹500 for helpers in their allowance.
  16. Raise in pay of pre-primary teachers by ₹1,000.
  17. Nativity cards to all citizens in Kerala. 
  18. The first batch of houses will be handed over to the Wayanad landslide victims.
  19. LSG General Purpose- ₹3236.76 crore
  20. An additional ₹2000 crore for VG-G RAM G Act. 
  21. ₹20 crore to set up a V.S. Centre in Thiruvananthapuram. 
  22. Rare earth corridor connecting Chavara and Kochi. 
  23. Kerala Spacepark (K-Space) will come up in Trivandrum. 
  24. KSEB- ₹1238 crore
  25. ₹1.5 crore- MT memorial cultural centre.
  26. ₹23.75 crore allotted for the functioning of the Treasury Department.
  27. 12th pay revision commission for State government employees. 
Major Takeaways 
  • The number of IT companies functioning in the State increased from 650 to 1,160 under the LDF government.
  • Insurance scheme for school students- ₹15 crore
  • ₹100 crore allocated for starting the preliminary works of the Rapid Rail Transport System (RRTS).
  • ₹1.46 lakh people were provided jobs through PSC.
  • ₹ 40,000 scrappage bonus for auto drivers. 
  • KSRTC- ₹178.94 crore
  • K-Homes for improving tourist infrastructure
  • ₹100 crore for various projects to reduce human-wildlife conflict. 
  • ₹150 crore for paddy procurement.
  • ₹153 crore announced for coastal development projects. 
  • ₹1,000 crore allocated for Rebuild Kerala Initiative. 
  • Sabarimala master plan development and Clean Pamba Project- ₹30 crore each
  • The Vizhinjam Seaport Project - ₹1000 crore
  • KFON- ₹112.44 crore. 
  • LIFE Mission- ₹1497 crore
  • Life saver project- ₹15 crore
  • Flood control works at Kuttanad - ₹50 crore. 
  • Elderly Commission- ₹0.5 crore
  • ₹2.5 crore for strengthening Ayurveda research. 
  • ₹100- Kera Project 

Transportation Infrastructure 

  • Roadways 
    • MC Road Widening- ₹5217 crore
    • New buses for KSRTC- ₹127 crore. 
    • ₹10 crore- the feasibility study for a tunnel road from Kattapana to Theni.
    • Auto-Scrap policy- ₹ 40,000 subsidy to push for e-Autos. 
  • Waterways 
    • ₹1500 crore for Inland Waterways.
  • Railways
    • ₹5 crore for the development of the Dharmadom Railway Station.
    • ₹100 crore- Rapid Rail Transport System (RRTS).
  • Metro
    • Kochi Metro extension Phase II- ₹79 crore. 

Startups and Industry

  1. ₹70 crore for young entrepreneurs. 
  2. Start Up Mission- ₹99.5 crore. 
  3. Cyber Valley Project.
  4. Entrepreneur Support Scheme- ₹110 crore. 
  5. Smart Villages. 
Healthcare 
  1. ₹203 crore allotted for cancer treatment and detection
  2. ₹30 crore for RCC Trivandrum.
  3. The pneumococcal vaccine will be administered to the elderly. 
  4. ₹30 crore for Ambulance Project. 
Sports
  1. ₹2 crore for sports development at Brennen College, Thalassery.
  2. ₹42.6 crore for the Sports Council. 
  3. ₹28 crore for the One Panchayat One Playground scheme. 
  4. ₹1 crore for Paralympics. 
  5. ₹30.5 crore for the development of the new sports centres. 
Education 
  1. ₹150 crore allocated for the free school uniform scheme
  2. ₹6 crore for the new block on the GIFT campus.
  3. Free education in Arts and Science colleges. 
  4. ₹3cr for Haritha Kerala Mission's menstrual cup scheme for higher secondary students and Kudumbashree workers
  5. Medical Colleges- ₹57 crore
  6. Mid-day meal programme- ₹266.66 crore
  7. Centre for Development Studies New Campus- ₹10 crore. 
  8. Global school- ₹10 crore. 
IT 
  1. A new IT policy is to be introduced. 
  2. IT Parks- ₹ 63 crore. 
  3. IT Park was introduced in Kottarakara- ₹10 crore. 
  4. 300 acres Cyber Valley in Kochi- ₹30 crore
  5. Hostel facilities will be set up for IT employees.
  6. ‘Work near home’ will be expanded to 200 centres- ₹150 crore.
  7. IT- ₹507 crore.
  8. Public WiFi- ₹15 crore.
  9. Funds for Technopark, Cyberpark, Infopark 
  10. KITE- ₹38.5 crore. 
Criticisms 
The principal opposition party, Congress, criticised the budget as having too many promises and very little execution. Opposition leader VD Satheesan talked about how the state still has the highest inflation rate in the country. He also pointed out how the budget has become a political statement. The critics pointed out the mounting debt and financial crunch amidst massive expenditure plans. Former BJP state president K. Surendran criticised the budget as the state is facing a severe financial crisis.  

Analysis 
Beyond doubt, this budget was paving away for populist announcements ahead of the Assembly elections. As last time, there is a massive push for infrastructure, transportation, etc. Also, enough push for the education, environment, and tourism sectors. No increase in Welfare pensions despite elections being at the doorstep. The budget has tried to touch multiple sectors and can be argued as a utilitarian one. 

The state is still under the grip of a cash crunch and borrowings, and there have been no concrete steps to overcome that situation. The onus of executing the budget has been put on the next government. It was also a highly political speech. The Finance Minister blamed the central government for cutting down financial grants for the state. There were special projects dedicated to constituencies of the ministers- Dharmadom (CM's), Kottarakara (Finance Minister's), and Thalassery (Speaker's). He also mentioned K M Shaji's remarks on religion and tried to correct them, as hunger is the main problem. Trump's tariffs and 

There has been a strong push for educational reforms, infrastructure, and transportation in recent years, moving away or diverting away from the traditional communist and socialist principles. Even then, freeing college education is seen as a measure to stop students from fleeing the state. The govt. has moved away from the K-Rail Silverline project to a high-speed RRTS. There was no increase in prices or taxes as such eye elections. Social welfare may have taken a back seat, unlike other typical LDF budgets. As mentioned before, it was a deviation from classical left-wing politics to more practical and pragmatic politico-economics.  

Credits- The Hindu, Manorama Online

Check full speech here- 

https://www.thehindu.com/news/national/kerala/kerala-budget-2026-live-updates-on-jan-29-2026/article70563754.ece

https://www.theweek.in/news/biz-tech/2026/01/29/kerala-budget-2026-here-is-a-wrap-up-of-all-the-major-announcements.html


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