Thiruvananthapuram (Keralam) [India], June 19 (ANI): The Congress-led United Democratic Front (UDF) government on Friday presented a revised State Budget for 2026-27, paving the way for a "New Age Kerala" (Puthuyuga Keralam) through reforms in health and education, employment generation, social welfare and infrastructure development.
In his maiden Budget address in the Keralam Legislative Assembly, Chief Minister VD Satheesan, who also holds the Finance portfolio, launched a scathing attack on the previous Pinrayi Vijayan-led Left Democratic Front (LDF) administration, accusing it of "deceptive practices" and leaving the state in a "staggering debt trap".
"Our State's globally acclaimed public health, educational, and social sectors have recently been confronting severe challenges and unprecedented strain. Kerala's social development indices, once a beacon of progress, have stagnated over the past few years. Compounding this crisis is the alarming spectre of youth unemployment," Satheesan said.
The Revised Budget, which is a modification of the 2026-27 pre-poll Budget presented by the LDF in January this year, envisages revenue receipts of Rs 1,69,646.37 crore and revenue expenditure of Rs 2,05,001.67 crore.
"My Government is steadfastly committed to ushering in a 'New Age Kerala' (Puthuyuga Keralam)- an era that harmonises economic growth driven by social justice backed by modern, environmentally responsible infrastructure development. To realize this vision, we are formulating a progressive strategy that maximizes the potential of modern technology to revitalize our healthcare and education sectors, generates robust employment opportunities, ensures the welfare of our senior citizens, and brings the marginalized and backward communities squarely into the mainstream," the CM said.
The State government painted a grim picture of Keralam's fiscal health, citing a White Paper that reveals an aggregate debt burden of Rs 5.07 lakh crore (as per estimates by RBI).
A staggering 77 per cent of total revenue is being consumed by salaries, pensions, and interest payments. The capital expenditure has plummeted to a "dismal" 1.3 per cent of GSDP, making it one of the lowest in India. The State's Own Tax Revenue (SOTR) fell from 6.94 per cent of GSDP in 2015-16 to 6.41 per cent in 2025-26, falling behind the national average of 7.14 per cent.
The UDF government accused its predecessor of "surreptitiously inflating" budget figures.
Satheesan claimed that his government must now bridge a Rs 20,500 crore shortfall caused by the previous government's "erroneous" projections of central grants and tax shares.
Due to this revenue deficit, the government announced an "unavoidable" reduction in the State Plan Outlay, which was previously fixed at Rs 35,750 crore.
An expert committee will be established to improve the functioning of the Keralam Infrastructure Investment Fund Board (KIIFB).
Satheesan said the government is burdened with the task of raising necessary funds to complete the projects valued at Rs 35,000 crore being implemented by the KIIFB. According to Satheesan, the off-budget borrowing and debt of KIIFB are contributing to the economic instability of the state.
Despite the financial crunch, the government highlighted its commitment to its pre-poll promises.
Satheesan said that even amidst severe crises, the Government has already implemented two of the six 'Indira Guarantees' they had promised- free travel for women and transgenders in KSRTC buses and the formation of a dedicated Department for the Welfare of the Elderly. It has also successfully enhanced the honoraria for ASHA workers, Anganwadi workers/helpers, and pre-primary teachers/helpers, along with revising the wages of school mid-day meal cooks.
The Government, Satheesan said, is committed to stimulating the economy through modern and innovative strategies attracting large-scale investments across various sectors, mobilise additional resources and ensure that the benefits of development are shared across all sections of society.
He announced the creation of the 'Southern Kerala Economic Corridor' and a 'Rare Earth and Critical Minerals Corridor' in the State.
The southern districts of Thiruvananthapuram, Kollam, and Alappuzha contain a unique convergence of strengths -- a world-class deep-sea port at Vizhinjam, critical mineral resources along the coast, rare earth deposits, space and technology institutions, and a blue economy of unmatched potential, he said.
These three districts will be integrated into a unified economic zone of national strategic importance.
Thiruvananthapuram (Zone 1) will be transformed into the State's Knowledge and Space Technology Hub; Kollam (Zone 2) into the nerve centre for mineral processing and rare earths; and Alappuzha (Zone 3) will be elevated as India's Blue Economy capital.
An allocation of Rs 100 crore is provided for the Rare Earth and Critical Minerals Corridor, and Rs 50 crore has been earmarked for the Southern Keralam Economic Corridor.
In the revised budget, Rs 1,534.98 crore has been earmarked for the farm sector, and the minimum support price of rubber has been raised to Rs 250 per kg. To strengthen environmental protection, Rs 243.80 crore has been allocated for forest and wildlife conservation.
Addressing the growing challenge of human-wildlife conflicts, the government has set aside Rs 192.20 crore to deploy advanced technologies and establish rapid response teams at identified hotspots. The budget also provides Rs 600 crore to offset losses incurred by KSRTC under the Priyadarshini free bus travel scheme for women and transgender persons.
Various infrastructure development projects will be formulated to position Keralam as South India's premier aviation-logistics hub, anchored by the State's four international airports. An amount of Rs 200 crore has been earmarked for the preliminary activities of this hub.
The budget has also proposed setting up a JC Daniel International Film City in Kochi with an estimate of Rs 100 crore, the creation of the MT Vasudevan Nair Cultural Park in Kozhikode with Rs 50 crore and a new Music Academy to be started in Thrissur in the name of the renowned music director, late Johnson Master with Rs 5 crore. Rs 72 crore has been earmarked for a new culinary institute to train skilled chefs and strengthen the state's hospitality industry.
A free "Oommen Chandy Health Insurance Scheme", providing comprehensive coverage up to Rs 25 lakh for all families, will be implemented. An amount of Rs 10 crore is allocated for its initial expenses.
An allocation of Rs 325.36 crore is made for the Tourism sector. A Pilgrimage Tourism Circuit Project will be implemented connecting pilgrimage centres such as Arthunkal Basilica, Ambalappuzha Temple, Kakkazham Mosque, Mannarasala, Krishnapuram Palace, Mata Amritanandamayi Math and Ochira Temple.
The Muziris Tourism Project will be expanded to include a live museum, heritage museums and boat journeys through traditional waterways. Rs 19 crore has been allocated for this project. (ANI)
