Thiruvananthapuram: Finance Minister KN Balagopal on Thursday presented the Pinarayi Vijayan-led LDF government’s final Budget, rolling out a mix of welfare measures and major investments in transport and technology ahead of the Assembly elections likely in April. Key announcements included a ₹1,000 hike in the monthly wages of anganwadi workers and ASHA workers, ₹3,820 crore for the Sthree Suraksha pension scheme, and ₹14,500 crore for social security pensions. The Budget also announced the constitution of the 12th Pay Commission and assured full payment of pending DA and DR arrears for government employees and pensioners in this fiscal. In addition, ₹1,871 crore was allocated to the transportation sector and ₹99.5 crore to the Kerala Startup Mission to boost innovation and entrepreneurship.

At the outset of his speech, Balagopal assured the Assembly that Kerala's financial health remains stable despite what he called "sustained neglect" by the Centre. The Budget focused on welfare schemes, decentralised development, and investments in transportation and technology infrastructure, all aimed at fostering long-term growth for the state.

Welfare Focus
Welfare spending dominated the Budget proposals, with a significant boost to pensions and social security schemes. Apart from the enhanced allocations for social security pensions, the government earmarked ₹3,820 crore specifically for the Sthree Suraksha pension. The daily wage of cooking staff in government schools has been increased by ₹25. The Budget also introduced an elderly budget, making Kerala the first state in the country to present a separate budget focusing on senior citizens.

In a move to strengthen local self-governments, Central purpose funds and maintenance funds allotted to local body institutions have been increased to ₹3,236.76 crore and ₹4,315.69 crore respectively for the 2026–27 fiscal. A special development fund will be created for district panchayats, while the honorarium of elected representatives in local bodies will be increased. A welfare fund for former local body representatives has also been announced.

The government has also decided to extend pension benefits to nuns and other women residing in faith homes such as convents and monasteries. It also announced that loans of survivors of the Wayanad landslides would be settled.

Infrastructure and Development
On the infrastructure front, the government allocated ₹8,265.43 crore for the Kerala State Road Transport Corporation, signalling continued support for the financially stressed public transport utility.

An amount of ₹5,217 crore has been earmarked for the development of the MC Road, a key arterial corridor in the state. The Budget also set aside ₹160 crore for solid waste management projects across Kerala. In another major announcement, the cabinet gave in-principle approval for the implementation of a Regional Rapid Transit System project in the state. A rare earth corridor will be developed between Chavara in Kollam district and Kochi, aimed at boosting value-added industrial activity.

The government also allotted ₹50 crore 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
The Budget further provided substantial allocations to boost Kerala’s growing technology and industrial sectors. A total of ₹1,871 crore has been set aside for the transportation sector, including initiatives to upgrade infrastructure and facilities. The Kerala Startup Mission will receive ₹99.5 crore, while ₹75 crore has been allocated for Technopark, ₹21.6 crore for Infopark, and ₹12.1 crore for Cyberpark.

A total of ₹35 crore has been earmarked for the Life Science Park, which aims to foster innovation and research in the biotechnology sector. Additionally, the Mining and Geology department will receive ₹8.2 crore for infrastructure and research activities. The government also allocated ₹110.46 crore for the coir sector, which is a key industry in Kerala, alongside ₹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 State Assembly, pointing to a mixed economic picture. Kerala’s economy recorded robust growth in 2024–25, even as rising public debt remains a challenge. The state’s Gross State Domestic Product grew by 6.19 per cent in real terms during the year, slightly lower than the 6.73 per cent growth recorded in 2023–24.