LDF Govt’s final Budget delivers wage hike, assured pension and welfare surge
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Finance Minister K N Balagopal on Thursday presented the Pinarayi Vijayan-led LDF government’s final Budget in the State Assembly, announcing a ₹1,000 increase in monthly wages for anganwadi and ASHA workers, the launch of an Assured Pension scheme guaranteeing 50 per cent of basic pay, and major allocations for welfare, transport, and technology as the state heads towards Assembly elections expected in April.
The Budget proposed ₹3,820 crore for the Sthree Suraksha pension scheme and ₹14,500 crore for social security pensions, while also assuring the full payment of pending dearness allowance and dearness relief arrears to government employees and pensioners during the current fiscal, alongside the constitution of the 12th Pay Commission.
Presented at 9 am, the Budget was described as the fourth-longest in the history of the Kerala Assembly, with Balagopal asserting at the outset that the state’s financial position remained stable despite what he termed sustained neglect by the Centre.
According to the estimates, revenue expenditure for 2026–27 has been pegged at ₹2,17,588.76 crore, while revenue receipts are projected at ₹1,82,972 crore, with the Budget placing strong emphasis on welfare spending, decentralised development, and long-term investments in infrastructure and technology.
The Assured Pension scheme for government employees is scheduled to begin from April, while a subsidy of three per cent on interest for loans to establish community living and retirement hubs for the elderly has been announced, with ₹100 crore allocated for the initiative.
Welfare measures dominated the proposals, with the daily wage of cooking staff in government schools increased by ₹25, and Kerala became the first state in the country to present a separate elderly budget focusing exclusively on senior citizens.
Pension benefits have been extended to nuns and other women residing in faith homes such as convents and monasteries, while the government also announced the settlement of loans taken by survivors of the Wayanad landslides.
In a bid to strengthen local self-governments, Central purpose funds allotted to local body institutions have been increased to ₹3,236.76 crore, while maintenance funds have been raised to ₹4,315.69 crore for the 2026–27 fiscal.
The Budget also proposed the creation of a special development fund for district panchayats, an increase in the honorarium of elected local body representatives, and the establishment of a welfare fund for former representatives.
On the infrastructure front, ₹8,265.43 crore has been allocated to the Kerala State Road Transport Corporation, signalling continued state support for the financially stressed public transport utility, while ₹5,217 crore has been earmarked for the development of the MC Road, one of the state’s key arterial corridors.
The Budget also set aside ₹160 crore for solid waste management projects and granted in-principle approval for the implementation of a Regional Rapid Transit System in Kerala.
Further, a rare earth corridor is proposed between Chavara in Kollam district and Kochi to promote value-added industrial activity, while ₹50 crore has been allocated for setting up a Defence Technological Innovation Hub and ₹20 crore for establishing a V S Centre in Thiruvananthapuram in memory of former Chief Minister V S Achuthanandan.
Technology and industry received focused attention, with ₹1,871 crore allocated to the transportation sector and ₹99.5 crore earmarked for the Kerala Startup Mission, while Technopark, Infopark, and Cyberpark will receive ₹75 crore, ₹21.6 crore, and ₹12.1 crore, respectively. The Budget also allotted ₹35 crore for the Life Science Park, ₹8.2 crore for the Mining and Geology department, ₹110.46 crore for the coir sector, ₹41 crore for the Cashewnut Board, and ₹56 crore for the cashew nut sector.
The Budget was presented a day after the Economic Review was tabled in the Assembly, which showed that Kerala’s Gross State Domestic Product grew by 6.19 per cent in real terms in 2024–25, slightly lower than the 6.73 per cent recorded in the previous year, even as rising public debt continues to pose challenges for the state economy.