Kerala Finance Minister K.N. Balagopal presented the 2026-27 state budget on January 29, 2026, crossing the ₹2 trillion milestone amid fiscal pressures and welfare focus. The allocations prioritize social security, with ₹14,500 crore for pensions and pay hikes for frontline workers, drawing from ongoing budget previews and prior year trends.
Budget Overview
Total expenditure is set to exceed ₹2 trillion, building on 2025-26’s ₹1.98 lakh crore base, with emphasis on sustainable growth despite a 6.19% GSDP rise in 2024-25. Revenue growth targets 15%, fiscal deficit at ~3.2% of GSDP, and capital outlay continues upward momentum.
Sector-Wise Allocations
Detailed 2026-27 demands await full release on budget.kerala.gov.in, but key sectors reflect 2025-26 budgeted estimates (in ₹ crore) with announced updates.
| Sector | 2025-26 BE (₹ Cr) | 2026-27 Key Focus Areas |
| Social Welfare & Nutrition | 16,054 | ₹14,500 Cr pensions; ₹1,000/mo hike for ASHA/anganwadi workers |
| Education & Culture | 26,398 | R&D, scholarships like ₹400 Cr Connect scheme |
| Health & Family Welfare | 10,874 | Urban/rural services; prior R&D ₹1,015 Cr |
| Rural Development | 8,021 | MGNREGS ₹4,120 Cr; housing subsidies |
| Agriculture & Allied | 8,259 | Rubber incentives, crop support |
| Transport | 5,411 | Roads, Kochi Metro ₹289 Cr |
| Police | 5,098 | Modernization |
| Urban Development | 2,049 | AMRUT, Life Mission |
| Welfare (SC/ST/OBC) | 3,488 | Targeted programs |
| Water Supply | 1,299 | Jal Jeevan Mission |
These allocations account for ~44% of total sectoral spending, maintaining Kerala’s welfare-led approach ahead of polls.
