Takeaways from the Latest Kerala Budget 2026

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The budget speech was held on 19th June by the Finance Minister and the current Chief Minister of Kerala, VD Satheesan, in the Kerala Legislative Assembly. Former Finance Minister of Kerala, K N Balagopal, presented the Interim budget on January 29th as a full budget. This is the first Budget of VD Satheesan after taking over as Kerala’s Chief Minister and Finance Minister, and will be the first budget of UDF 2.0 after their exemplary victory in the Kerala elections 2026. The financial White Paper report was tabled in the Assembly on the 4th, based on their campaign promise. This is a revised budget that will replace the old budget passed earlier. 

CM said that the budget came in the greater context of debt burden, global inflation, and growing youth unemployment. 


Major Announcements from the Budget Speech 

  1. GSDP- ₹6,85,28,316  crore
  2. Public Debt- ₹5.07 lakh crore.
  3. Revenue Deficit- ₹35,355.3 crore 
  4. Annual Expenditure- ₹2,39,907.14 crore 
  5. Fiscal Deficit- 3.4%
  6. Debt-GDP Ratio- 31.1%.
  7. Kerala’s real GSDP growth rate- 6.19%
  8. Budget Speech- 1 hour 39 minutes
  9. Restructuring and revamping KIIFB.
  10. Make Kerala a ‘unified Port City’
  11. ₹400 crore for Mission Samudra
    • A Maritime policy for developing 13 non-major ports. 
    • An international maritime museum will be established, showcasing the rich maritime history of Kerala.
  12. Southern Kerala Economic Corridor- ₹50 crore
  13. Kerala Aviation hub- ₹200 crore
  14. Invest Kerala Cell and Kerala Investment Advisory Council
  15. MSME Growth Scheme- ₹100 crore
  16. Oommen Chandy health insurance scheme- ₹10-crore 
  17. One Kerala Karuthal Mission
  18. Declare Kerala a carbon-neutral state by 2050
  19. Space Economy- ₹5 crore
  20. Battery energy storage systems in panchayats.
  21. Housing scheme for the SC/ST community. 
  22. Urban growth mission- ₹100 crore
  23. KSRTC compensation for free bus travel scheme- ₹600 crore
  24. Wage hike for school cooks, pre-primary teachers, and ayaahs. 
  25. Special package announced for Wayanad, Kasaragod, and Idukki. 
  26. ₹50 crore for Gen-Z initiatives and new Technologies
  27. Kerosene subsidy for fishermen increased to ₹75
  28. Sidharthan Anti-Ragging and Student Welfare Act.
  29. Academic Council to curb political influence in higher education.
  30. Makalkoppam project. 
  31. Quarterly tax for private buses reduced by 50%.
Major Takeaways 
  • The number of IT companies functioning in the State increased from 650 to 1,160 under the LDF government.
  • The fair value of land in Kerala will be reviewed in view of complaints of discrepancies in the present fair value fixed in various regions.
  • Attracting foreign students via 'Semester in Kerala'.
  • The e-Stamping facility will be extended to private insurance companies and Non-Banking Financial institutions.
  • Cultural biennale in Ponnani. 
  • ₹5,952 crore for PWD
  • A Tax Intelligence Cell will be set up to curb tax fraud.
  • Supplyco to adopt supply-chain model for self-sufficiency
  • Anti-ragging measures undertaken.
  • The use of scientific steps to mitigate human-animal conflict in Kerala- ₹192 crore
  • KSRTC- ₹178.94 crore
  • K-Homes for improving tourist infrastructure
  • ₹100 crore for various projects to reduce human-wildlife conflict. 
  • Operation Toofan- ₹10 crore
  • Kerala dairy production to be raised to 1 crore litres per day in 3 years; surplus milk to be converted to dairy products. 
  • Road safety and accident reduction initiatives to be strengthened.
  • silver economy, launching initiatives for elderly welfare, caregiving, and geriatric healthcare innovations.
  • ₹14,500 crore allocation of welfare pensions. 

Transportation Infrastructure 

  • Roadways 
    • Outer Ring Road project in Thiruvananthapuram- ₹100 crore
    • Road Tax to be reduced. 
    • ₹1 crore study for the elevated highway to Kozhikode airport.
    • Kottayama Skywalk project to be restarted.
    • R&B development- ₹900 crore
  • Railways
    • Balaramapuram-Vizhinjam underground railway project to be fast-tracked.  
  • Waterways 
    • ₹400 crore for Mission Samudra.
    • Vizhinjam is projected as a green bunkering hub
    • A fishing harbour to be established at Poonthura. 
  • Metro
    • Light metro projects for Thiruvananthapuram, Kozhikode- ₹20 crore
  • Airways
    • Kerala Aviation hub connecting 4 International airports- ₹200 crore

Startups and Industry

  1. Kerala MSME Growth Scheme 
  2. Invest Kerala Cell and Kerala Investment Advisory Council
  3. MSME Growth Scheme- ₹100 crore
  4. Aluva-Perumbavoor- Global Furniture Hub- ₹10 crore
  5. Kochi-Thrissur belt- Gold Manufacturing Corridor/Global Gold Hub- ₹10 crore
  6. Rare earth corridor
  7. An incubation centre for start-ups and aspiring entrepreneurs- ₹10 crore
  8. ‘Krishi Sakhi’ initiative for women empowerment in agriculture.
Culture and Tourism 
  1. Reach Kerala Project
  2. A Cookery Institute.
  3. Guruvayur, Kottiyur, and Sabarimala to be developed in Tirupati model. 
  4. Sree Narayana Guru Cultural Centre in Delhi. 
  5. Tourism to be declared an industry; houseboat waste treatment plant in Alappuzha. 
  6. Alappuzha Housebat Waster Management Pant 
  7. JC Daniel Film City, Kochi
  8. MT Cultural Park, Kozhikode 
  9. The Musiris tourism project will be expanded. 
  10. Aranmula Kannadi Exhibition Centre.
Healthcare 
  1. Oommen Chandy health insurance scheme- ₹10-crore 
  2. A new Medical College will be established in Haripad and a second one in Trivandrum
  3. Cancer centre in Malapuram
  4. Kasaragod, Idukki, and Manjeri medical colleges to be upgraded. 
  5. Nilambur Medical College to get its own building
Sports
  1. A modern football stadium in the Malabar region
  2. Vision 2036 to be implemented to nurture sports talents for the Olympics
  3. Jawaharlal Nehru Centre for Scientific Temper. 
  4. Financial assistance for diagnosis and health check-ups will be provided for people above 40 in hospitals.
Education 
  1. Kerala Knowledge Valley project
  2. Global Job Watch Tower- ₹2 crore
  3. A Special Research Park.
  4. Johnson Music Academy in Thrissur
  5. Tribal University and Indigenous Knowledge Centre- ₹50 crore
  6. Private Universities Bill- ₹100 crore
  7. Kerala School of Planning, Architecture and Design- ₹2 crore
  8. Academic Council to curb political influence in higher education. 
  9. Girls' friendly school with free campuses. 
IT 
  1. Malayalam AI Initiative- ₹10 crore. 
  2. Mission Geo Keralam
  3. Cyberpark Kozhikode Upgrade. 
Criticisms 
Leader of Opposition Pinarayi Vijayan criticised the UDF government's Budget, alleging that its claim of a severe financial crisis was contradicted by the allocations. “Several announcements appeared to be repackaged versions of schemes announced by the LDF government under different names,” he alleged. LDF as a whole has said that this is a pro-privatisation and corporate budget without any welfare, also ignoring the Union government's policies of hurting the state's finances.  Former Finance Minister Thomas Isaac questions bridging the ₹20,000-crore shortfall. Former MP and MLA, M B Rajesh, said that this budget is a wishlist rather than a reality. 

‘There is no money...’ Rajeev Chandrasekhar MLA expresses disappointment with the budget 2026. He claims that the five Indira Guarantees remain unfulfilled. 

Kozhikode and Trivandrum Light metros hardly got any strong allocation. Also, the Oomen Chandy Insurance Scheme hardly got Rs 10 crore, which gives every family Rs 25 lakh insurance for which is not sufficient. There have been increased taxes on liquor as a sin tax. LDF also highlighted that there was very little emphasis on the agricultural sector. There was no hike in welfare pensions as promised. 

Analysis 
Beyond doubt, this budget was paving the way for populist announcements as well as for the foundation for a Puthuyuga Kerala, as CM VD Satheesan claims, is a New Kerala with inclusive growth and sustainable development. He said that the government is committed to stimulating the economy through attracting large-scale investments across various sectors, mobilising financial resources for the public exchequer, and ensuring the equitable distribution of wealth. In the opening remarks, he also claimed that Kerala’s social and development indicators have been witnessing a slump of late. Private investment the only way to boost the state’s economy, said CM. 

As per the campaign promise and the chief argument of CM Satheesan and UDF in opposition, that Kerala Infrastructure Investment Board (KIIFB) is unconstitutional, the government. He has appointed a special expert committee to examine potential problems and reforms for the same. Restructuring KIIFB for transparency has been an important UDF policy. They claim that KIIFB’s off-Budget borrowings are creating economic instability. 

CM has announced that he will give enough space for private players and corporates to invest in the state to overcome economic and demographic challenges. ₹400 crore for Mission Samudra and trying to make Kerala a unified port city is the biggest highlight of the budget. This is a dream project of VD Satheesan himself. There was a strong push for women's empowerment with a long list of girls and women. Also, which has to be read with the execution of the Priyadarshini scheme as part of the Indira Gandhi. As last time, there is a massive push for infrastructure, transportation, etc. Also, enough push for the education, environment, and tourism sectors. The budget has tried to touch multiple sectors as well as almost all of the geographies of the state. 

The state is still under the grip of a cash crunch and borrowings, and there have been no concrete steps to overcome that situation. There were special projects dedicated to constituencies of the ministers and UDF MLAs. There was no increase in Welfare pensions despite election-based promises. 

There has been a strong push for educational, healthcare, infrastructure, and transportation in recent years, which is a continuation of the previous LDF governments. The government has moved away from the K-Rail Silverline project and didn't mention any high-speed railway in the budget. Social welfare may have taken a back seat, unlike other typical UDF-LDF budgets. Lastly, we can see this is a new-age-modern budget yet with a touch of culture and historicity. 

Credits- The Hindu, Manorama Online/Onmanorama, ThePrint, YouTube

Check full speech here- 

https://www.thehindu.com/news/national/kerala/kerala-revised-budget-2026-as-chief-minister-vd-satheesan-will-present-udf-government-first-budget/article71120561.ece

https://thefederal.com/category/states/south/kerala/kerala-budget-2026-27-maritime-plan-infra-push-here-are-the-highlights-247277

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

https://theprint.in/india/kerala-budget-allocations-contradict-crisis-claims-says-lop-vijayan/2964376/

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