Kerala finance minister KN Balagopal presented the budget for 2026-27 FY on Thursday, making big announcements including a ₹14,500 crore outlay for social security pensions, free undergraduate education in state-run arts colleges, a hike in allowances for ASHA and anganwadi workers and the 12th Pay Revision Commission.
Balagopal, presenting the last budget of the current LDF dispensation and making the fourth-longest speech in the history of the Assembly, claimed that the State had “recovered from the fiscal crisis” it had been facing for a long time and that it’s debt is “not unmanageable” compared to the Union government and several other states.
“We have been able to generate an additional revenue of around ₹1,27,747 crore in terms of own tax revenue...the average annual own tax revenue of this government is ₹73,002 crore. The average own tax revenue of this government is ₹73,002 crore,” the minister said, applauding taxpayers in the state for the rise in own tax revenue. He added that the government intends to award taxpayers contributing to the government and allocated ₹5 crore towards it.
Welfare sops accounted for a big proportion of the budget, with a ₹14,500 crore outlay for social security pensions. Five categories of welfare pensions including those for elderly and differently-abled are currently being disbursed for 6.2 million pensioners with each beneficiary getting ₹2000 per month. However, even though the LDF had declared that pensions would be hiked up to ₹2500 in its manifesto during the 2021 elections, the promise hasn’t been met. The hike in monthly pensions from ₹1600 to ₹2000 was activated only in November last year.
However, the finance minister announced hikes in allowances for a variety of grassroots workers in various schemes. The minister announced ₹3720 crore for the Sthree Suraksha scheme, ₹400 crore for ‘connect to work scholarship’, enhancement of wages of anganwadi workers by ₹1000 and helpers by ₹500, wages of ASHAs by ₹1000, pre-primary teachers by ₹1000, noon-meal workers by ₹25 and literacy preraks by ₹1000.
Balagopal also presented an “elderly budget”, with the allocation towards various schemes for the elderly accounting for 19% of the total plan outlay. As per official figures, the share of elderly population in the state is 18.7%. Promises in the budget include retirement homes in all districts, pneumococcal vaccination programme and an Abhaya Kendra (homestay) scheme for artists.
The first batch of homes for the survivors of the Mundakkai - Chooralmala landslide in Wayanad would be handed over by the third week of February, the minister said, with the rehabilitation of the victims to be completed in a time-bound manner.
In good news for government employees, the minister promised that the 12th Pay Revision Commission will submit its report within three months for timely action and that all pending dues of dearness allowance (DA) and dearness relief (DR) would be paid by the end of the FY. Employees currently under the NPS can switch to the assured pension plan, he said.
Though he did not divulge its details, the FM said a new scheme is being planned to ensure free education at the undergraduate level in arts and science colleges in the state. The scheme would be applicable in government-run and aided colleges.
He also announced an initial allocation of ₹100 crore for the Regional Rapid Transit System (RRTS) between Thiruvananthapuram and Kasaragod. In a fresh promise, the minister said a rare earth corridor connecting Vizhinjam with Chavara and further extension till Kochi will be set up to ensure maximum potential use of rare earth elements like thorium and scandium found in the region.
The budget announcements were met with criticism from the UDF and BJP. Leader of the opposition VD Satheesan said the FM “destroyed the sanctity of the budget” by unnecessarily mixing politics with it. “It contains only political announcements to deceive the people before elections,” he said.
BJP leader PK Krishnadas said the LDF minister raised “unsubstantial allegations” against the Centre. “Over a period of five years, the Centre transferred ₹1,16,000 crore in tax to the State. The Centre also transferred an additional ₹44,000 crore to the state to address the fiscal deficit incurred by the state through unnecessary spending,” he said.
