Kerala’s final Budget under the second Pinarayi Vijayan government has doubled down on welfare promises while trying to signal fiscal discipline ahead of assembly elections due later this year.
Presenting the 2026–27 Budget in the Assembly, Kerala Finance Minister K.N. Balagopal announced that social security and welfare board pensions will be raised from Rs 1,600 to Rs 2,000 per month, with Rs 14,500 crore earmarked for pensions in the coming year.
Honorariums for anganwadi and ASHA workers will go up by Rs 1,000 a month, addressing long‑standing demands from frontline women workers in health and childcare.
The Budget also sets aside Rs 400 crore for the Chief Minister’s Connect Work Scholarship scheme, aimed at supporting youth and students, and expands pension coverage to nuns and other women living in convents and faith homes.
In a major relief measure, the state has decided to settle loans taken by survivors of the Wayanad landslides, which devastated parts of the district in 2024.
‘New Kerala’ narrative amid fiscal stress
Balagopal described the document as a realistic Budget for a “New Kerala”, insisting that the state’s finances are “stable” despite what he termed continued neglect and borrowing constraints imposed by the Centre.
He argued that the government was balancing welfare obligations with development spending, and highlighted the Economic Review’s estimate that Kerala’s real GSDP grew 6.19 per cent in 2024–25, only slightly below 6.73 per cent in 2023–24.
The Budget follows earlier decisions to raise social security pensions to Rs 2,000 in October 2025, but stops short of the Left Front’s manifesto promise of Rs 2,500, leaving scope for criticism from beneficiary groups.
With salary arrears and DA dues still pending, government employees are watching closely for follow‑up orders and notifications over the coming months.
Rapid transport and infrastructure projects
On the infrastructure front, the cabinet has given in‑principle approval for a Regional Rapid Transit System (RRTS) project in Kerala, which would link key urban centres with faster mass transit, though detailed costs and timelines have not been announced yet.
The Budget speech also reiterated support for ongoing capital projects and coastal protection schemes flagged in earlier policy documents, while critics warn that rising public debt could limit execution.
Balagopal framed the Budget as his sixth and last in this term, saying it aims to benefit “everyone from children to the elderly” without turning into an unrealistic “dream Budget”, a point he had stressed in interviews before the presentation.
Note: The budget presentation is ongoing as of the publication of the article. Check our coverage for more updates.