Mission Samudra, 10,000 new MSMEs & Land Reforms 2.0: Key highlights of Kerala Budget 2026-27

Thiruvananthapuram: Chief Minister and Finance Minister V D Satheesan on Friday presented the UDF government's maiden Budget in the Kerala Assembly, unveiling a mix of welfare measures, infrastructure projects, healthcare initiatives, investment reforms and economic development programmes.

Presenting the revised Budget for 2026-27, Satheesan said the government was addressing a difficult fiscal situation marked by a revenue shortfall and mounting liabilities while continuing welfare commitments and investing in long-term growth sectors.

Fiscal backdrop

• Kerala's aggregate debt stands at ₹5.07 lakh crore.
• Salaries, pensions and interest payments account for 77% of revenue receipts.
• The government cited a revenue shortfall of ₹20,500 crore.
• The Plan Outlay was revised from ₹35,750 crore to ₹30,370 crore.
• Accumulated liabilities were estimated at ₹87,012 crore.

Mission Samudra and maritime economy
The Budget's flagship announcement was Mission Samudra, a ₹400-crore programme aimed at integrating Kerala's 600-km coastline, ports and inland waterways to transform the state into a maritime powerhouse within five years.

Key announcements include:

• ₹400 crore for Mission Samudra.
• ₹50 crore for the Southern Kerala Economic Corridor linking Thiruvananthapuram, Kollam and Alappuzha.
• ₹100 crore for the Rare and Critical Minerals Corridor.
• Priority for the Balaramapuram-Vizhinjam railway line and Vizhinjam-Navaikulam Outer Ring Road.
• Plans to make Vizhinjam India's first green bunkering port.
• ₹50 crore for an International Maritime Museum.
• Exploration of Blue Bonds through marine public-private partnerships.
• Development of Alappuzha as India's Blue Economy Capital.

Investment, industry and employment

• Invest Keralam, a single-window investment facilitation mechanism chaired by the Chief Minister.
• ₹100 crore for the Kerala MSME Growth Scheme.
• Establishment of 10,000 new MSMEs.
• Data-driven Invest Keralam Cell to resolve land and investment bottlenecks.
• ₹2 crore for the Global Job Watch Tower.
• ₹5 crore for promoting the space economy and private satellite manufacturing.
• Global Convention Centre at Kochi airport.
• Kerala Mark certification for indigenous products.

Education and knowledge economy

• ₹100 crore for Kerala Knowledge Valley.
• Amendments to facilitate the entry of leading foreign universities.
• Collaboration with globally reputed institutions.
• ₹50 crore for Wayanad Tribal University.
• ₹60 crore for a Research Park modelled on IIT Madras Research Park.
• International Skill Training Centres in association with ASAP Kerala and NORKA.
• Global Placement Cell to facilitate safe overseas employment.

Healthcare and medical infrastructure

• Total allocation of ₹2,076.02 crore for Medical Care and Public Health.
• Oommen Chandy Health Insurance Scheme offering free health coverage of up to ₹25 lakh per family.
• ₹10 crore initial allocation for the scheme.
• ₹100 crore for Kerala Health and Life Sciences City.
• ₹100 crore for upgrading medical colleges in Kasaragod, Idukki, Wayanad and Manjeri, operationalising the second medical college in Thiruvananthapuram and establishing a medical college at Haripad.
• ₹10 crore for modernising Ernakulam Medical College.
• Autonomous status for selected medical colleges.
• ₹5 crore to upgrade Malappuram Taluk Hospital into a super-speciality general hospital.
• ₹10 crore for a cancer centre in Malappuram.
• ₹20 crore for 10 mobile testing laboratories in rural areas.
• Support for children with Type 1 and brittle diabetes through insulin, insulin pumps and CGM sensors.
• Comprehensive revamp of the Medisep health insurance scheme.

Welfare and social security

• The government retained its focus on welfare spending.
• Social security pensions to continue at ₹2,000 per month.
• Total pension commitment of ₹14,500 crore.
• ₹1,000 monthly cash assistance for women engaged in the care economy.
• Free KSRTC travel for women and transgender persons with an allocation of ₹600 crore.
• Honorarium for Anganwadi workers increased by ₹1,000.
• ASHA workers' honorarium increased from ₹9,000 to ₹12,000.
• Literacy mission instructors to receive an additional ₹1,000 per month.
• Noon meal workers to receive a daily wage increase of ₹25.
• Honorarium increase for pre-primary teachers and ayahs.
• Menstrual hygiene initiative in schools.

Land Reforms 2.0 and housing

• New Land Management Policy.
• Creation of a Land Bank using unused government and PSU land.
• Land Reforms 2.0 through the amendment of outdated laws.
• Faster commercial land conversion procedures.
• Land Pooling Framework for large projects.
• Greater powers for KINFRA and INKEL in land acquisition.
• Technology-enabled revision of land fair value.
• One-time settlement scheme for 1,46,355 undervaluation cases involving ₹703 crore.
• Disposal of all pending Section 28A appeals by October 31, 2026.
• Pattayam for all eligible coastal residents.
• Time-bound resolution of pattayam issues in hilly regions.
• Regularisation of existing constructions on cardamom patta land.
• Extension of e-stamping facilities to private insurance companies.

Tourism and regional development

• The government announced measures to strengthen tourism infrastructure.
• Total tourism allocation of ₹325.36 crore.
• Steps to grant industry status to tourism.
• ₹19 crore for the Muziris Heritage Project.
• Resumption of the Kottayam Skywalk project.
• Green Marshals scheme at major tourist destinations.
• Pilgrimage tourism circuit connecting key religious centres.
• ₹5 crore for dynamic lighting at Athirappally waterfalls.
• Amendments to allow more tourism activities in plantation areas.

Culture, cinema and heritage

• Several major cultural projects were announced.
• ₹100 crore for the J C Daniel International Film City in Kochi.
• Industry status for the cinema sector.
• ₹50 crore for the M T Vasudevan Nair Cultural Park in Kozhikode.
• ₹1 crore for a memorial for actor Salim Kumar.
• ₹1 crore for a cultural centre and museum in memory of artist Namboothiri.
• ₹5 crore for the Johnson Music Academy in Thrissur.
• ₹1 crore for a music academy in memory of ghazal singer Umbayi.
• Increase in grant for Aranmula Palliyodams from ₹10,000 to ₹15,000.

Non-Resident Keralites

• The Budget announced several measures targeting the Malayali diaspora.
• Global Pravasi Rehabilitation Scheme for returning emigrants.
• Pravasi Investment Company for infrastructure investments.
• Restructuring of the Pravasi Dividend Scheme.
• Expansion of distress relief and legal aid for NRIs.
• Upgrade of the Norka Business Facilitation Centre into a single-window system.
• Expansion of KSFE Pravasi Chitty.
• International Skill Training Centres.
• Global Placement Cell.
• Elderly welfare and silver economy
• The government announced plans to develop a silver economy ecosystem.
• ₹10 crore for the Department of Elderly Welfare.
• Formulation of a Silver Economic Policy.
• Six-month Care Giver Certification Programme through nursing colleges and hospitals.
• Focus on geriatric healthcare, retirement infrastructure and elderly entrepreneurship.

Agriculture, dairy and fisheries

• Comprehensive package for the cashew sector.
• Special benefits for pottery workers.
• Increase daily milk production to one crore litres within three years.
• ₹102.88 crore for dairy development.
• Poultry clubs in schools.
• New coconut storage centres.
• Rubber support price increased to ₹250 per kg.
• ₹200.93 crore for fisheries.
• Special housing scheme for fishermen.
• Kerosene subsidy for fishermen increased to ₹75.
• Government wage support on days fishermen cannot venture into the sea.
• Comprehensive revision of fisheries accident insurance.

Major sectoral allocations

• Public Works Department: ₹5,952.29 crore
• SC Sub Plan: ₹2,979.32 crore
• Rural Development: ₹2,138.80 crore
• Medical Care and Public Health: ₹2,076.02 crore
• Transport: ₹1,578.83 crore
• Agriculture and Allied Sectors: ₹1,534.98 crore
• General Education: ₹1,477.57 crore
• Energy: ₹1,284.75 crore
• Industry: ₹1,115.48 crore
• Water Supply and Sanitation: ₹895.59 crore
• Tribal Sub Plan: ₹859.48 crore
• Labour and Labour Welfare: ₹650.46 crore
• Irrigation and Flood Control: ₹559.39 crore

The Budget attempts to combine welfare spending with investments in infrastructure, healthcare, education, maritime development, and private-sector growth, while addressing Kerala's fiscal constraints through a series of structural reforms and revenue mobilisation measures.