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The Congress-led United Democratic Front (UDF) government’s ‘dream projects’ of transforming Kerala into a “cohesive port city” and aviation hub, a Land Reforms 2.0 initiative for harnessing land resources for development and a Kerala Knowledge Valley designed to make the State a higher education destination featured high on the Revised Budget for the 2026-27 fiscal presented by Chief Minister V.D. Satheesan in the Kerala Assembly on Friday (June 19, 2026)
Among other things, Mr. Satheesan, who handles the Finance portfolio, has enhanced the minimum support price (MSP) of rubber from ₹200 to ₹250 and the kerosene subsidy for fishers to ₹75. A glut of announcements marked his 98-minute presentation of the Budget which promised “governance with empathy.”
Other major announcements
Other major announcements included a ‘Southern Kerala Economic Corridor’ linking Thiruvananthapuram, Kollam and Alappuzha districts, a plan for a Tribal University and Indigenous Knowledge Zone in Wayanad and a ‘Global Job Watch Tower’ for monitoring future employment landscapes.
Major allocations in the Budget include ₹600 crore for financing the Indira Guarantee free-travel scheme for women and transgenders in ‘Ordinary’ Kerala State Road Transport Corporation buses, ₹400 crore for Mission Samudra projects which include the ‘Kerala as a Port City’ proposal, ₹100 crore for a Rare Earth and Critical Minerals Corridor, ₹200 crore for the preliminary activities of the Aviation Hub proposal, ₹100 crore for the Kerala Knowledge Valley and ₹50 crore for the Wayanad Tribal University project.
The Budget has earmarked ₹100 crore for the Kerala Health and Life Sciences City which is envisioned as an integrated healthcare ecosystem meant to deliver ‘high-standard healthcare services and promote medical education and research.
Mr. Satheesan announced plans to constitute an expert committee to initiate ‘comprehensive structural reforms and overhaul’ of the Kerala Infrastructure Investment Fund Board (KIIFB), in line with a recommendation in the White Paper on the State’s fiscal health. The Budget was silent on welfare pensions or revising the retirement age of government employees, but it said that the NPS pension scheme will revamped after reviewing the Assured Pension Scheme announced by the previous LDF government.
Resource mobilisation
In terms of resource mobilisation, the road tax on electric vehicles priced up to ₹10 lakh has been reduced from 5% to 3% and the road tax on EVs priced between ₹15 lakh and ₹20 lakh reduced from 8% to 5%. The road tax on EVs priced above ₹40 lakh has been increased from the 10% to 15%.
The Budget has also fixed the sales tax rate at 120% for alcoholic beverages with alcohol strength ranging from 0.5% v/v (volume by volume) to 10% v/v, and 175% for products with alcohol strength above 10% v/v and up to 20% v/v.
The quarterly taxes on all-India tourist permit (AITP) buses stand reduced to encourage more buses to register in Kerala. The Budget also announced the ‘Flood Cess Arrears Settlement Scheme, 2026’ to recover the “substantial arrears” that have accumulated in the flood cess levied in the wake of natural disasters.
Other major Budget announcements included a ‘Kerala MSME Growth Scheme’ (one of the Dream Projects) and a family health insurance coverage up to ₹25 lakh named after former Chief Minister Oommen Chandy that was included in the Indira Guarantees.
The Revised Budget, which is a modification of the 2026-27 pre-poll Budget presented by the LDF in January this year, envisages revenue receipts of ₹1,69,646.37 crore and revenue expenditure of ₹2,05,001.67 crore, both estimates lower than in the January Budget.
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