Chief Minister V.D. Satheesan, who also holds the Finance portfolio, presented the revised Kerala Budget for 2026-27 in the Legislative Assembly on Friday. Aimed at steering the state towards a “New Age Kerala” (Puthuyuga Keralam), the budget prioritises an investment-led economy, healthcare infrastructure, and welfare guarantees while navigating severe fiscal constraints
The Budget anchors the UDF government’s growth strategy on three pillars: turning the state into a cohesive port and aviation hub, mobilising assets through Land Reforms 2.0, and positioning as a higher education destination via the Kerala Knowledge Valley.
The revised Budget has allocated a massive Rs 2,076.02 crore to boost the health sector, unveiled Mission Samudra to drive a maritime-led economy, and proposed a comprehensive clean-up of the Kerala Infrastructure Investment Fund Board (KIIFB). The Budget represents the newly formed United Democratic Front (UDF) government’s first major policy roadmap aimed at fostering investment-led growth amid severe fiscal stress.
The Budget prioritises reviving stagnant social indicators and tackling unemployment through targeted welfare and economic reforms.
To pivot Kerala into a port-led, sustainable coastal economy, the Chief Minister unveiled Mission Samudra with an initial allocation of Rs 400 crore. A maritime policy focusing on 13 non-major ports will be prepared to transform the state into a prominent global maritime gateway.
With an initial allocation of Rs 10 crore, the UDF government announced the Oommen Chandy Health Insurance Scheme. This key “Indira Guarantee” pre-election promise provides Rs 25 lakh in health insurance support per family.
The Budget has also proposed an international maritime museum with an allocation of Rs 750 crore, the JC Daniel International Film City in Kochi at an estimated cost of Rs 100 crore, and the creation of the MT Vasudevan Nair Cultural Park in Kozhikode with an allocation of Rs 50 crore.
The Chief Minister, in his Budget speech, announced that an expert committee will be formed to optimise the performance of the Kerala Infrastructure Investment Fund Board (KIIFB). Chief Minister Satheesan noted that the government faces the heavy burden of securing funds for KIIFB projects worth Rs 35,000 crore. He added that the Board’s off-budget borrowings and rising debt are severely impacting the state’s financial stability.
The revised Budget prioritises farming, environmental conservation, and social welfare. Key allocations include Rs 1,534.98 crore for the agricultural sector and an increased rubber minimum support price for rubber to Rs 250 per kg. Additionally, Rs 243.80 crore is dedicated to protecting forests and wildlife.
A Kerala Knowledge Valley will be established to attract elite global universities and institutions backed by a Rs 100 crore allocation. Additionally, the state earmarked Rs 100 crore for the Kerala Health and Life Science City project. This upcoming healthcare hub will feature multi-speciality hospitals, a medical college, research institutions, diagnostic hubs, training centres, and rehabilitation facilities
The government announced the implementation of light metro projects in Thiruvananthapuram and Kozhikode. Rs 20 crore has been earmarked for preliminary work.
The Chief Minister said the government will implement ‘Land Reforms 2.0’ to review land laws that were relevant in the past and amend outdated statutes. He announced that a comprehensive ‘land management policy’ would be formulated to address structural challenges in freeing up land for industrial projects.
An amount of Rs 200 crore has been earmarked to upgrade the general aviation sector at Kerala’s four international airports. Key elements of this plan involve building pilot training and flight simulation centres.
Opposition Leader Pinarayi Vijayan strongly condemned the UDF government’s revised budget. He claimed it merely repackaged previous LDF announcements, pushed a pro-privatisation agenda, and neglected welfare programmes.
BJP state president Rajeev Chandrasekhar said the Budget was rich in announcements but lacked clarity on how the government planned to finance the various projects and welfare schemes proposed in it.
BJP Parliamentary Party leader B.B. Gopakumar said the Budget shows no major change except the change in the Chief Minister’s chair, adding that it lacks solutions for revenue deficit, provides low allocations for welfare schemes and merely rebrands the central government’s projects without benefiting the people.