Published Jan 29, 2026 | 12:38 PM ⚊ Updated Jan 29, 2026 | 12:38 PM
Finance Minister KN Balagopal presenting the Kerala budget 2026.
Synopsis: Kerala Finance Minister KN Balagopal presented his sixth Budget and warned against the presence of those forces who wanted to create divisions within society. The budget included several key announcements, including the handover of houses to victims of the deadly 2024 landslides in Wayanad.
Finance Minister KN Balagopal on Thursday, 29 January, presented his sixth Budget and said Kerala is witnessing a new normal. He also warned against the presence of those forces who wanted to create divisions within society.
Balagopal said that when the Left government came into power, it had assumed that the BJP-led Union government would financially strangle the state, and it had prepared accordingly.
The budget, 77th since the inception of Kerala, included several key announcements, including the handover of houses to victims of the deadly 2024 landslides in Wayanad.
The Budget document noted an expected revenue collection of ₹1.82 lakh crore and total expenditure of ₹2.4 lakh crore. Effective capital expenditure of Ris expected at ₹30961.48 crore and revenue deficit of ₹34,587 crore (2.12 percent of the state’s gross domestic product).
Fiscal deficit of ₹55,420 crore (3.4 percent of the domestic product) is expected, while revenue is expected to increase by ₹45,889.49 crore. The state has also set a targeted increase in its own tax revenue of ₹10,271.51 crore and non-tax revenue of ₹1595.05 crore.
Leader of Opposition in Kerala Assembly VD Satheesan criticised the budget, calling it a political document and labelling the announcements as election gimmicks.
With elections expected to be announced in the first week of March, he noted that only a month remains, leaving little room for significant changes. Referring to the new normal, Satheesan said that many announcements were made without any real intention of implementing projects
Balagopal announced that by February, the first batch of houses constructed for the victims of the Mundakkai-Chooralmala Wayanad landslide will be handed over to the beneficiaries
Presenting the budget, Balagopal announced the honorarium of ASHAs, Anganwadi workers and Anganwadi helpers.
Honorarium of ASHAs and Anganwadi workers will increase by ₹1,000, while helpers’ honorarium will increase by ₹500. Welfare pensions will be raised in phases, with ₹14,500 crore set aside for pension disbursal next year.
The announcements come amid a prolonged protest by ASHA workers, who staged a 265-day agitation demanding better pay and retirement benefits.
Further, the honorarium of local body representatives is to be increased. A separate welfare scheme will be formulated for the welfare of local body representatives.
Presenting the budget, Balagopal criticised that there is no unity within the state to pressure the Union government to disburse the funds meant for the state, but got frozen due to various reasons.
Meanwhile, Balagopal also announced the 12th Pay Revision Commission. He said the report will be received within three months and implemented promptly.
He said the remaining Dearness Allowance (DA) and Dearness Relief (DR) instalments of government employees and pensioners will be paid in full. One instalment of DA will be given along with the salary for February. The remaining DA and DR instalments will be paid along with the salary for the month of March.
The budget also allocated ₹160 crore for solid waste management in local bodies. Balagopal said that the digital land survey has been completed in 10 lakh hectares of the state.
Further, the honorarium for Saksharatha Preraks has been raised by ₹1,000. School kitchen staff will receive a ₹25 increase in wages. ₹606.5 crore has been allocated for the Karunya Benevolent Fund.
Continuing the rural employment guarantee programme will require ₹2,000 crore, following a halt in the revenue grant. For the same, ₹1,000 crore has been allocated for Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin), which was formerly known as MGNREGA
National Highway construction projects are expected to progress rapidly.
Balagopal said that the state government could claim with immense pride over the power generation in the state, which didn’t experience power cuts or load shedding.
He announced that Medisep 2.0, a comprehensive health insurance coverage for all serving employees of the state government, will be launched on 1 February. ₹100 crore has been allocated towards the group insurance scheme for fisherfolk. Medisep insurance scheme to be extended to employees in the cooperative sector also.
₹30 crore allocated for cancer treatment through medical colleges and ₹3 crore for menopause clinics in district hospitals.
He added that under the second Pinarayi Vijayan government, 1,104 children from marginalised communities benefited from the Unnathi Overseas Scholarship, enabling them to pursue education abroad. Balagopal said Kerala’s infant mortality rate has fallen below that of the US.
145,586 candidates were appointed through the PSC, accounting for 60 percent of all PSC recruitments in India.
Meanwhile, the government allocated ₹20 crore for establishing a VS Centre in Thiruvananthapuram. It will serve as a centre that will document the legacy of Communist stalwart and former chief minister VS Achuthanandan.
The state has also invested ₹5,000 crore in developing basic infrastructure in the sports sector, and 961 jobs have been provided to athletes, Balagopal said.
One crore allocated by the finance minister for the development of the Malayalam language using an AI model. ₹100 crore allocated for Regional Rapid Transit System (RRTS), covering a 583 km corridor from Thiruvananthapuram to Kasaragod. ₹30 crore has been allocated for creating a Cyber Valley
The state government also allocated ₹20 crore for establishing model autorickshaw stands
The Kerala Kala Kendram will receive ₹10 crore to set up permanent stages for traditional Kerala art forms, while ₹20 crore has been allocated to address the needs of gig workers, including the formation of resting centres and welfare initiatives.
The pension for Cancer and AIDS patients will be increased by ₹1,000. The state government also announced a Life Saver programme. According to it, road accident victims will get free treatment for the first five days. The state will also introduce group insurance for Haritha Karma Sena workers, auto drivers, and lottery agents.
The budget also announced the Accident insurance scheme for school students, and ₹15 crore has been allocated for that.
Meanwhile, riding on its promise, the Kerala governemnt allocated ₹20 crores for Nativity Card, a new, permanent photo-affixed card that will replace the temporary, often-renewed Nativity Certificate.
The state government also announced ₹400 crore for the Connect to Work scheme, offering ₹1,000/month to educated youth (18–30) from families earning ≤₹5 lakh/year. Eligible participants include those in skill training or preparing for competitive exams.
A new project to attract youth to the agriculture sector will also be launched, with ₹20.92 crore allocated for horticulture initiatives. Additionally, ₹10 crore will be provided for the development of the Agriculture Customer Centre.
The government allocated ₹318.46 crore for animal welfare projects, with ₹12.76 crore expected as support from the Union government. An additional ₹38 crore has been set aside for veterinary services. The Livestock Development Corporation will receive ₹30.46 crore, while the Poultry Corporation is allocated ₹10 crore.
The government allocated ₹275 crore for Kudumbashree, along with ₹2 crore for Local Self-Government departments to continue the extreme poverty eradication programme. Kasaragod, Wayanad, and Kuttanad have been allocated ₹80 crore, ₹75 crore, and ₹80 crore, respectively. Additionally, ₹30 crore has been allotted for cleaning the Pamba River under the Clean Pamba Project.
₹5.5 crore has been allocated for the Meenachil Valley project, while ₹28.75 crore has been allotted for the Kavery initiative. ₹100 crore allocated for the NABARD RAD project for the development of the Kuttanad region.
The budget has set aside ₹100 crore to address human-wildlife conflicts.
As part of the Kochi–Bengaluru corridor enhancement project, land is being acquired for the Kochi–Palakkad Hi-Tech Industrial Corridor. Of the total 1,710 acres required, 1,350 acres have already been procured.
The government also allocated ₹6 crore for the One District, One Product project. ₹242 crore has been allotted for traditional industries. The handicrafts sector will get ₹4.43 crore, while khadi and powerloom sector will receive ₹59 crore. Another ₹4 crore allocated for weavers and related work such as spinning, printing and dyeing.
IT parks in the state — Technopark, Infopark and Cyberpark — will receive budget allocations of ₹225 crore, ₹21.6 crore and ₹12.1 crore, respectively.
Balagopal announced that Kerala will unveil a new IT policy, with four new missions to be launched for enhancing the IT sector. It also allocated ₹2 crore to establish culture incubators in Kochi.
Further, ₹65 crore has been allocated for the development of non-major ports in the state and ₹15 crore for the Pathanamthitta–Kottayam road, to facilitate pilgrimage travel. The Vypeen–Munambam road in Ernakulam district will also receive funding from the ₹100 crore allocated for road development.
Balagopal also said the Kattapana-Theni underground road connectivity is being explored. ₹79.03 crore allocated for the second phase of Kochi Metro, and KMRL will receive ₹3 crore for developmental activities.
The State Biodiversity Board will get ₹13 crore, while the Pollution Control Board will receive ₹3 crore. The Institute of Climate Change Adaptation Mission has been granted ₹1 crore, and ₹13 crore has been allocated for biological conservation initiatives.
The midday meal scheme will receive an additional allocation of ₹260.66 crore, apart from the initial ₹150 crore as the state’s share. Balagopal said the move was necessitated by inadequate funding from the Union government.
The government also allocated ₹1128 crore for the general education sector and increased the monthly allowance for librarians by ₹1000. The pension for journalists has been increased by ₹1,500, raising it to ₹13,000.
The state government increased the Budget allocation for arts and cultural activities by 30 percent. A total of ₹28 crore is allocated for the One Panchayat, One Playground initiative, while the College Sports League will receive ₹2 crore. Additionally, GV Raja Sports School and the Kannur District Sports Division have been allotted ₹17 crore each to support sports development in the state.
₹1 crore has been allotted to launch a new project for organising the Paralympics. ₹30.5 crore will be spent on developing new sports centres and improving the sports sector.
Balagopal announced that Peralassery in Kannur will have a Manaveeyam Veedhi-like (Thiruvananthapuram) cultural corridor. ₹5 crore has been allocated for IT hostels for women, benefiting those working in Infopark, Kochi, and Technopark, Thiruvananthapuram.
The Mazhavillu project for transgender welfare and health will receive ₹6 crore. ₹2 crore allocated to support drug menace prevention activities. ₹80.90 crore has been set aside for anganwadis to ensure the distribution of eggs and milk for children. Additionally, under the Nirbhaya zero-tolerance policy addressing attacks against women, ₹13 crore allocated to strengthen its initiatives.
Further, ₹47 crore has been allocated for the modernisation of jails
A total of ₹52 crore has been allocated for the comprehensive rehabilitation and development of tribal and marginalised communities, including the Vedar, Nayadi, Kalladi, Arundhathiyar, and Chakliyar groups. This fund is intended to support a wide range of initiatives aimed at uplifting these communities both economically and socially.
The government also allocated ₹50 lakh for the newly established Kerala State Elderly Commission, meant to protect the rights of the elderly and ₹99.64 crore allocated towards the welfare of the minority communities in the state.
(Edited by Muhammed Fazil with inputs from Dileep V Kumar and Sreelakshmi Soman.)
