Kerala’s 2025-26 budget increased total expenditure by 11% to ₹1,98,582 crore from 2024-25 revised estimates, maintaining welfare dominance at 42-44% of spending while trimming agriculture and education. Revenue grew 15%, with fiscal deficit targeted lower at 3.2% of GSDP, reflecting efficiency amid rising committed costs like pensions.
Key Sectoral Changes
Social welfare saw modest 1% growth to ₹13,497 crore, prioritizing pensions, while health dipped slightly before minor rebound to ~₹9,967 crore. Education faced an 11% cut to ₹22,603-24,328 crore, and agriculture dropped sharply 18% to ₹6,360 crore amid reallocations.
Expenditure Comparison Table
Major sectors (₹ crore) highlight pruning in capex-heavy areas, offset by welfare stability (2024-25 RE vs 2025-26 BE).
| Sector | 2024-25 RE | 2025-26 BE | % Change |
| Social Welfare & Nutrition | 13,333 | 13,497 | +1% |
| Health & Family Welfare | 10,210 | 9,967 | -2% |
| Education & Culture | 25,430 | 22,603 | -11% |
| Police | 4,574 | 4,699 | +3% |
| Transport | 6,429 | 5,816 | -10% |
| Agriculture & Allied | 7,737 | 6,360 | -18% |
| Water Supply & Sanitation | 2,303 | 1,997 | -13% |
| Energy | 433 | 389 | -10% |
| Irrigation & Flood Control | 1,174 | 983 | -16% |
These shifts underscore Kerala’s welfare-first strategy despite fiscal pressures, setting the stage for 2026-27’s ₹2 trillion milestone.
