Kerala Budget 2026-27: Welfare promises, fiscal challenges in focus as VD Satheesan presents maiden budget

KOCHI: Chief minister and finance minister VD Satheesan began presenting the Kerala Budget in the assembly on Friday, outlining the UDF government's economic priorities amid mounting fiscal challenges and expectations of welfare-focused announcements.The budget is being closely watched as it is the first full financial statement of the new UDF government and is expected to reveal how it plans to balance its ambitious welfare agenda with the state's strained finances.Among the key announcements expected are measures related to the UDF's flagship Indira Guarantees, the future course of the Kerala Infrastructure Investment Fund Board (KIIFB), and a promised "surprise" for government employees.Ahead of the budget, former finance minister K N Balagopal raised concerns over the Centre's decision not to provide a Revenue Deficit Grant (RDG) to Kerala following the recommendations of the 16th Finance Commission.Balagopal said Kerala had expected a substantial RDG allocation and had factored it into its financial planning. According to him, the state had estimated receiving Rs 14,138 crore as the first instalment during the current financial year.