Rising Above the Storm

“The first and second Pinarayi governments have formulated and implemented comprehensive action plans to strengthen social security and welfare schemes, while addressing Kerala’s long standing needs that have persisted for over a quarter century. We have faced formidable challenges- on one side, natural disasters including the COVID-19 pandemic; on the other, economic hardships. Yet none of these setbacks could halt Kerala’s progress. The systematic financial management in recent years has ensured that fiscal obstacles do not stand in the way of realising the vision of creating Nava Keralam.”

-K.N. Balagopal
Minister for Finance

Kerala is advancing steadily along its development trajectory. The government has ensured an uninterrupted flow of resources to sustain this momentum, including crucial financial support for the Kerala Infrastructure Investment Fund Board (KIIFB). The government’s top priority remains welfare with development.

Huge Growth in Own Revenues

• Own tax revenues rose from ₹38,995 crore to ₹90,000 crore.

• Own non-tax revenues increased from ₹8,425 crore to ₹19,000 crore.

• Total own revenues surged from ₹47,420 crore to ₹1 lakh crore.

Declining Debts

• Debt-to-GDP ratio dropped from 38.47% in 2020-21 to 34.87% in 2024-25.

• Loans reduced by Rs 1.5 lakh crore in five years

• Kerala advances toward a ₹2 trillion budget, with income and expenditure reaching ₹2 lakh crore.

Public Expenditure Hit All Time Record

• Averaged ₹68,028 crore annually (2011-16)

• Averaged ₹1.17 lakh crore annually (2016-21)

• Averaged ₹1.64 lakh crore annually (2021-24)

Tax and non-tax collections have been strengthened, with greater emphasis on non-tax sources. Kerala leads the nation as the first state to optimally reorganise its GST department.

Central Agencies Affirm Growth

• Central agencies praise Kerala’s superior financial management.

• RBI and C&AG rank Kerala fifth among states for financial consolidation, far ahead in stability.

• Economic growth more than doubled, averaging 12%.

• Gross State Domestic Product rose from ₹5.26 lakh crore (2015-16) to ₹12.49 lakh crore (2024-25).

• Per capita income nearly doubled, from ₹1,66,246 (2016) to ₹3,08,338 (2024).

• Capital expenditure saw significant increases.

Universal Welfare

• Welfare pension raised from ₹600 to ₹2,000; beneficiaries grew from 34 lakh to 62 lakh, with monthly distribution ensured.

• Kerala advances toward universal free healthcare:

• 42 lakh families covered under Karunya Arogya Suraksha Padhati (KASP), providing ₹5 lakh annual free treatment per family.

• State contributed ₹4,541 crore; Centre provided only ₹853 crore.

• MediCEP health insurance enhanced from February 1, 2026 for government employees, pensioners and dependents.

• ₹5,849 crore allocated for Life housing scheme.

• ₹6,033 crore for Jal Jeevan Mission.

• KSRTC monthly allocation: ₹123 crore (₹13,029.72)crore over 9.5 years); second Pinarayi government provided ₹8,027.72 crore

Growing Public Finance Sector

• KSFE surpassed ₹1 trillion in business.

• Kerala Financial Corporation (KFC) achieved AA rating.

• KFC loans: ₹1,121 crore disbursed to 3,183 persons under Chief Minister’s Entrepreneurship Scheme; ₹100 crore for startups.

• Up to ₹50 crore loans for MICE tourism.

• Kerala Lottery sustains livelihoods for over 2 lakh people, backed by strong interventions.

• ‘Jeevan Raksha’ group insurance for government employees: ₹5 lakh family cover on natural death.

• Treasuries modernised via IT; 20 new buildings; dedicated headquarters for Treasury Directorate.

• KIIFB projects worth ₹93,749 crore across 22 sectors (health, education, coastal protection, water, energy, roads, bridges, railways etc.): 104 projects completed by September 2025 .

Kerala Budget 2026 – Highlights

• Monthly wages of Anganwadi workers increased by ₹1,000.

• Monthly wages of Anganwadi helpers increased by ₹500.

• Monthly wages of ASHA workers increased by ₹1,000.

• Monthly wages of pre primary teachers increased by ₹1,000.

• Daily wages of school mid day meal cooks increased by ₹25.

• Monthly wages of literacy animators increased by ₹1,000.

• Daily wages of contract and daily wage employees increased by 5%.

• Journalists’ pension increased by ₹1,500 per month.

• Monthly allowance of librarians increased by ₹1,000.

• Monthly pensions for patients suffering from cancer, leprosy, AIDS and tuberculosis increased by ₹1,000.

• The 12th Pay Revision Commission announced

• All pending DA (Dearness Allowance) and DR (Dearness Relief) instalments of government employees and pensioners will be paid in full.

• The house building advance scheme for government employees restored.

• From 1 April, the current participatory pension scheme will be replaced by an Assured Pension Scheme.

• ₹22.27 crore allocated for marketing and distribution network to promote and distribute Kudumbashree products.

• A ‘Life Saver’ scheme will provide cashless treatment for the first five days to road accident victims.

• ₹30 crore is allocated under the KARE rare disease treatment scheme to provide medicines for spinal muscular atrophy.

• A KIIFB project of ₹5,217 crore is proposed for development of the Thiruvananthapuram–Angamaly MC Road.

• Bypasses will be built at Kilimanoor, Nilamel, Chadayamangalam, Ayur, Pandalam and Chengannur towns, and various junctions will be upgraded as part of the same project.

• Nativity cards will be provided to every citizen in Kerala.

• A rare earth corridor connecting Vizhinjam port with Chavara and Kochi will be established with its hub at Chavara

• A modern Gig Hub will be set up for gig workers.

• A new health insurance scheme will be set up for families outside the eligibility criteria of the Karunya health security scheme.