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Kerala Budget 2026, Kerala Budget 2026 Explained: The Kerala government on Friday announced several infrastructure projects aimed at improving the state’s economy and connectivity. Presenting the budget for the financial year 2026-27, Chief Minister V D Satheesan, who is also holding the finance portfolio unveiled a a series of major infrastructure projects, including the launch of Mission Samudra, the fast-tracking of the Balaramapuram-Vizhinjam underground railway line and the Vizhinjam-Navaikulam Outer Ring Road project.
The Budget also outlined plans for an Economic Corridor, a Rare Earth and Critical Minerals Corridor, and light metro systems in Thiruvananthapuram and Kozhikode.
Speaking in the assembly, the Chief Minister said that government will launch Mission Samudra to integrate the state’s 600-km-long coastline, two international seaports, a container transhipment terminal, 17 non-major ports and numerous other aquatic resources. The government has allocated an amount of Rs 400 crore for the Mission Samudra projects which includes the Port City.
“Envisioning Kerala as a cohesive ‘Port City,’ this initiative will seamlessly integrate our road, sea, rail, and inland waterway networks with manufacturing zones and greenfield cities, thereby fundamentally transforming the State into a thriving maritime economy,” the CM said.
He also added that the government will formulate ‘Kerala Maritime Policy’ to catalyse the development of four non-major ports: Vizhinjam-Kovalam, Kollam, Beypore and Azhikkal. The move aims to promote seaborne freight transport, port-led industries, logistics and allied shipping activities.
“It will leverage the land, buildings, and other assets across the remaining 13 non-major ports to foster maritime tourism, logistics, maritime industries, maritime legal education, and the establishment of a maritime museum through public-private partnerships,” he added.
The CM also announced that land acquisition and construction activities for Balaramapuram-Vizhinjam underground railway and the Vizhinjam-Navaikulam Outer Ring Road projects will be expedited. On completion, these projects will seamlessly connect the Vizhinjam Transshipment Terminal with other parts of the country and improve transit networks.
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- Southern Kerala Economic Corridor, Rare Earth and Critical Minerals Corridor
CM Satheesan also announced about the establishment of ‘Southern Kerala Economic Corridor’ by integrating three districts: Thiruvananthapuram, Kollam and Alappuzha into a unified economic zone of national strategic
importance. An amount of Rs 50 crore has been earmarked for the Southern Kerala Economic Corridor.
“Thiruvananthapuram (Zone 1) will be transformed into Kerala’s Knowledge and Space Technology Hub; Kollam (Zone 2) into the nerve center for mineral processing and rare earths; and Alappuzha (Zone 3) will be elevated as India’s Blue Economy capital,” he said.
The state government has also announced an allocation of Rs 100 for the Rare Earth and Critical Minerals Corridor. “By seamlessly linking logistics, technology, manufacturing, research, and natural resources into a single developmental framework, the Southern Kerala Economic Corridor will engineer a robust blended economy, attract massive private investment, and ensure Kerala’s position at the vanguard of the nation’s strategic and maritime development sectors in the future,” the Chief Minister said.
- Aviation Hub
Citing the growing demand for international air travel and the state’s vast potential in the export, logistics and tourism sectors, the Kerala government announced plans to develop a range of infrastructure projects aimed at positioning the state as South India’s leading aviation and logistics hub. An allocation of Rs 200 crore has been earmarked for preliminary activities related to the proposed hub.
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“The Aircraft Maintenance, Repair, and Overhaul (MRO) sector will be strengthened. Simulator-based pilot training centers, along with aviation maintenance engineering training and skill development facilities aligned with DGCA standards, will be established,” the CM said.
- Kerala Urban Growth Mission
CM Satheesan also announced that a comprehensive project ‘Kerala Urban Growth Mission’ is being formulated to drive planned urban development across the state. An allocation of Rs 100 crore has been earmarked for the initiative in the 2026-27 Budget.
“With the assistance of international-standard urban planning and infrastructure advisory firms, detailed master plans and highly investment-friendly development projects will be prepared for our cities. Paramount importance will be given to overhauling public transport in cities, formulating comprehensive storm-water management projects and implementing scientific waste management protocols,” the CM said.
- Thiruvananthapuram and Kozhikode Light Metro projects
The state government has allocated Rs 20 crore for the proposed light metro projects in Thiruvananthapuram and Kozhikode. The Chief Minister said the Detailed Project Report (DPR) for the Thiruvananthapuram Light Metro is currently being prepared, while steps have been initiated to expedite the feasibility study for the Kozhikode Light Metro project.
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“To position Thiruvananthapuram and Kozhikode at the forefront of urban infrastructure development, the Thiruvananthapuram and Kozhikode Light Metro projects, promised by successive governments over the years, but never realized, will finally be implemented,” he noted.
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