Kerala’s Budget 2026–27 was presented on Thursday by Finance Minister K N Balagopal, marking the final full budget of the state’s current Left Democratic Front (LDF) government ahead of assembly elections. The budget emphasises social welfare, economic stability and realistic fiscal management against a backdrop of growth and rising public debt.
The budget allocates Rs 14,500 crore for social security pensions, one of the largest outlays in the state’s welfare programme, signalling a strong focus on support for vulnerable and elderly citizens.
Pay revisions and honorariums for frontline workers received notable attention: the state increased pay for pre-primary teachers and raised honorariums for ASHA workers and other community workers, reflecting the government’s intent to strengthen grassroots services.
Proposals to enhance the daily wages of Asha and Anganwadi workers and increase support for informal sector jobs were also highlighted as key measures aimed at uplifting working families and boosting rural incomes.
The budget announced a monthly honorarium hike of ₹1,000 for front-line community workers, including Accredited Social Health Activists (ASHA) and Anganwadi workers. Anganwadi helpers will receive an additional ₹500 per month. The move is aimed at improving earnings for grassroots health and child-care workers who play a critical role in service delivery across both rural and urban Kerala.
The budget has also proposed a ₹1,000 increase in monthly pay for pre-primary teachers and literacy mission motivators. In addition, the daily wages of school cooking staff will be raised by ₹25.
Kerala’s latest Economic Survey, tabled in the Assembly ahead of the budget, shows the state economy grew by about 6.19 percent in real terms in 2024-25 with robust expansion across services, primary and secondary sectors. Per capita income climbed to around ₹1,90,000, positioning Kerala amongst the top Indian states in terms of individual income.
Despite these gains, fiscal challenges persist. Public debt has risen in recent years, and while the fiscal deficit is projected to shrink moderately in 2025-26, officials continue to stress prudent resource management and revenue augmentation.
Balagopal described the budget as “pragmatic and populist”, balancing welfare commitments with fiscal responsibility in an election year. Core priorities include continued investment in education, healthcare and infrastructure, alongside schemes aimed at poverty reduction and livelihood support.
This budget also serves as a capstone to the second Pinarayi Vijayan administration’s developmental agenda, highlighting commitments to inclusive growth and economic resilience as Kerala eyes broader social progress.
Opposition leaders have responded critically, questioning the budget’s fiscal realism and calling for clearer strategies to address long-term debt pressures and revenue diversification.