Kerala Chief Minister V D Satheesan has begun his stint as the finance minister with the 'statutory warning' that ₹20,500 crore is missing from the Budget his predecessor K N Balagopal had presented on January 29.

This was Satheesan's way of saying that when he steps into the Legislative Hall on June 19 to present his maiden budget, he is a man injured. This injury has been caused, Satheesan's 'white paper' says, by Balagopal's wild and baseless assumptions of what the 16th Finance Commission would offer Kerala.

Satheesan said that it was eventually revealed that Kerala's actual gain would be ₹20,500 crore less than what Balagopal had anticipated. The Chief Minister said he would have to first find this 'missing' ₹20,500 crore before making his plans for Kerala.

It is near certain that Satheesan will announce the implementation of pay revision in his first Budget speech. Balagopal, who had announced pay revision for government employees and teachers in his last Budget speech on January 29, had left Satheesan enough space to do so.

Balagopal's Budget figures show that both salary and pension expenditures will increase by over 31 per cent in the ongoing fiscal, an indication that he had budgeted for the payment revision. In a normal year, salary and pension increase by less than 10 per cent.

Two policy moves could help Satheesan save at least ₹10,000 crore this fiscal. One, the finance minister could delay the disbursal of the revised pay. Two, he can increase the pension age of 56 by at least one year. The 'white paper' has said that an increase in pension age by one year alone would save Kerala ₹6,000 crore.

Satheesan is also expected to fetch at least ₹7,000 crore by declaring a policy that the Left considers ideologically sacrilegious: Disinvestment in 'non-strategic' private sector enterprises.

Through his Budget speech, Satheesan will also attempt to mobilise another ₹1,000 crore by redeploying vast tracts of land and other valuable assets of PSUs that remain underutilised and economically unproductive. In total, he could be eyeing ₹8,000 crore from disinvestment and commercialisation of underutilised public assets.

Satheesan will end Kerala Infrastructure Investment Fund Board's (KIIFB) nearly decade long run as an off-Budget entity. Henceforth, the ₹4,000-4,200 crore that flowed out of the Budget and into KIIFB's coffers annually will be retained in the state's consolidated fund. In other words, the Kerala Budget will be richer by ₹4,000-4,200 crore.

Junking certain LDF promises can also free budgetary funds. Over ₹4,000 crore can be freed if two of Balagopal's latest schemes are dropped: 'Sthree Suraksha' and 'Connect to Work Scholarship'.

The 'Sthree Suraksha Scheme' promised ₹1,000 per month to women, including trans-women, aged between 35 and 60 who are not the beneficiaries of any other existing social security scheme; 31 lakh women were expected to benefit. This was allocated ₹3,720 crore.

The second was an incentive intended to benefit 5 lakh educated youth engaged in upskilling themselves. ₹400 crore was set aside.

These schemes are likely to be dropped as the UDF government has alternatives for both these schemes under its five Indira Guarantees. For women there are two Indira Guarantees: free bus rides, which is already operational, and ₹1,000 for every college-going girl in Kerala. For the youth, there is 'interest-free' loans of ₹5 lakh for young prospective entrepreneurs.

The savings generated by dumping these two schemes will be used to implement the Indira Guarantees.

Satheesan is not expected to increase welfare pensions in this Budget. At ₹2,000 per month, the monthly outgo would be ₹14,500 crore; it was in November 2025 that the previous LDF government had increased the pension from ₹1,600 to ₹2,000. Satheesan will not burden himself with more on this count in the first year.

A welfare measure in Balagopal's last Budget that attracted huge attention -- free education up to graduate level -- will also not find a place in Satheesan's first. In Balagopal's Budget, the promise was not backed by any financial commitment, a clear sign that the announcement was made to impress the voter than to implement.

The 'Insurance Scheme For School Students', an accident/life insurance for Class 1 to 12 students, could stay. The annual requirement is nominal, ₹15 crore.