Kerala's Congress-led United Democratic Front (UDF) government on Friday unveiled its first budget, outlining an ambitious roadmap for building a `new-age Kerala' through infrastructure development, investment promotion, healthcare expansion and employment generation.
Presenting the revised budget for 2026-27 in the Kerala Assembly, Chief Minister and Finance Minister VD Satheesan said the state was facing significant economic challenges, including fiscal stress, hidden liabilities, declining remittances and inflationary pressures. He said the budget was designed to lay the foundation for Kerala’s development trajectory over the next five years.
"Our social and development indicators have been declining, youth unemployment is rising, and the state requires a new growth strategy," Satheesan said while presenting the budget.
One of the major announcements was the decision to constitute an expert committee to restructure the functioning of the Kerala Infrastructure Investment Fund Board (KIIFB).
The government said KIIFB's off-budget borrowings and accumulated debt burden had contributed to economic instability and required urgent corrective measures.
However, the former LDF finance minister, Thomas Isaac, questioned how the government planned to bridge an estimated ₹20,000-crore fiscal shortfall.
A flagship initiative of the budget is Mission Samudra, launched with an allocation of ₹400 crore to transform Kerala into a major maritime economy and global logistics hub.
Key initiatives include:
A comprehensive maritime policy covering 13 non-major ports
Development of a port-led economy
Establishment of an international maritime museum
Expansion of maritime-linked industries and services
The government hopes the initiative will position Kerala as a key player in global shipping and trade networks.
The budget places strong emphasis on attracting private investment and strengthening entrepreneurship.
Major announcements include:
Single-Window Invest Kerala Cell to accelerate industrial approvals
Support for establishing 10,000 MSMEs with an allocation of ₹100 crore
₹50 crore for startups, innovation hubs and Gen Z entrepreneurship
₹5 crore for expansion of the SpacePark project
₹2 crore for a Global Job Watch Tower to track emerging employment opportunities and future skills
A Kerala Knowledge Valley project, aimed at attracting leading global universities and research institutions, received an allocation of ₹100 crore.
Healthcare emerged as one of the biggest beneficiaries, receiving an allocation of ₹2,076 crore.
Among the major announcements:
Oommen Chandy Health Insurance Scheme launched with an initial allocation of ₹10 crore
Insurance coverage of up to ₹25 lakh per family
Annual health check-ups for citizens above 40 years
Strengthening medical colleges in Kasaragod, Idukki, Wayanad and Manjeri
Operationalisation of the second medical college in Thiruvananthapuram
New medical college at Haripad with ₹100 crore allocation
The government also announced the Kerala Health and Life Science City project with ₹100 crore. The project will include multi-speciality hospitals, a medical college, rehabilitation facilities, research institutions and diagnostic centres.
The Reach Kerala project will promote medical tourism by integrating modern medicine and AYUSH services.
Other health initiatives include:
Golden Hour trauma care project
School Health Brigade
Tribal health clusters
Coastal Care Units
Mobile testing laboratories
Rare disease medicine support
Strengthened epidemic surveillance systems
Expanded water quality testing facilities
The government also promised phased settlement of pending Karunya health scheme dues.
The general education sector received ₹1,477.57 crore.
Key proposals include:
Girls-friendly school campuses
Improved sanitation facilities and sanitary napkin access
Jawaharlal Nehru Centre for Scientific Temper with ₹25 crore allocation
Kerala School of Planning, Architecture and Design under the PPP model
To address campus-related concerns, the government announced:
Sidharthan Student Distress App
Sidharthan Anti-Ragging and Student Welfare Act
Academic Council to reduce excessive political influence in universities
Bridge programmes for job-seeking graduates
The government announced preliminary work for light metro projects in Thiruvananthapuram and Kozhikode with an allocation of ₹20 crore.
KSRTC will receive ₹600 crore to compensate for revenue losses arising from free bus travel for women and transgender passengers.
The agriculture sector received ₹1,535 crore.
Key measures include:
Rubber minimum support price raised to ₹250 per kg
Kerosene subsidy for fishermen increased to ₹75
Additional support for agricultural productivity and livelihoods
Recognising growing concerns over wildlife attacks, the government earmarked ₹192.20 crore for technology-driven measures to mitigate human-wildlife conflict.
Special development packages focusing on education, healthcare and livelihoods were announced for:
Wayanad
Kasaragod
Idukki
A new housing scheme for SC/ST communities was also unveiled.
The government announced the One Kerala Karuthal Mission, which aims to support families facing extreme poverty through corporate social responsibility (CSR) funds and public contributions.
A new initiative titled `Makalkoppam' will focus on preventing crimes against women.
The Budget also allocated ₹10 crore for "Operation Toofan", an anti-narcotics campaign aimed at curbing drug-related crimes across the state.
On the taxation front, the government proposed:
A new tax slab for low-alcohol beverages
Reduced road tax on electric vehicles priced below ₹20 lakh
The measures are intended to encourage cleaner transportation while enhancing tax revenues.
The first budget of the UDF government signals a shift towards investment-led growth, maritime development, healthcare expansion and human capital creation.
Satheesan said the government's objective was to stimulate economic activity through broad-based development, attract large-scale investments, mobilise resources for the public exchequer and ensure equitable distribution of wealth.
With major projects such as Mission Samudra, Kerala Knowledge Valley, Health and Life Science City and expanded healthcare coverage, the government has laid out an ambitious vision for transforming Kerala into a globally connected, investment-friendly and socially inclusive economy over the next five years.