Chief Minister V D Satheesan began the presentation of his government's maiden budget for 2026-27, underlining the deep fiscal crisis, the state faces. He flagged the expected shortfall of ₹20,500 crore resulted by the previous government's miscalculation of revenue deficit grant.

In his introductory speech, Satheesan was critical of the way in which the LDF government tried to inflate the plan expenditure by not including actual plan estimates in the budgetary allocation.

All these along with dip in remittance and looming inflation have landed the state in a financial muddle. Satheesan, however said, the government has already started fulfilling its promises inspite of the hurdles by implementing promises under the Indira Guarantee scheme. 

The Assembly will take up a general discussion on the revised Budget from June 22 to 24, followed by discussions and voting on Demands for Grants on June 29 and 30. The Appropriation Bill is scheduled for consideration on July 1.

Ahead of the Budget presentation, the government had tabled a white paper on the state’s finances, with the Chief Minister describing it as a status report on Kerala’s fiscal health. Titled “Kerala’s Fiscal Health: A Status Report”, the document recommends disinvestment, privatisation, or closure of public sector undertakings in non-strategic sectors.

However, it does not clearly outline a roadmap for restructuring PSUs with social and welfare obligations, such as KSRTC, KSEB, and the Kerala Water Authority, into commercially viable entities.

Despite the Budget having a plan size of ₹35,000 crore, the chief minister said that upon assuming office and examining the figures, the government had found that ₹20,000 crore of the total ₹35,000 crore was missing. All eyes are now on the Budget to see whether the UDF government’s pre-election promises translate into allocations for welfare schemes, as well as initiatives, and key policy commitments.