Kerala Budget 2026: UDF Unveils 5-Year ‘New Era Keralam’ Roadmap, Focuses On Jobs, Health And Infra

Last Updated:June 19, 2026, 12:09 IST

Kerala CM V.D. Satheesan presents UDFs first 2026-27 Budget, outlining a five-year New Era Kerala roadmap focused on health, education, jobs, senior welfare and infrastructure

Kerala Chief Minister VD Satheesan on Friday presented the first Budget of the UDF government for the financial year 2026-27, outlining a five-year roadmap to build a “New Era Keralam" through reforms in health and education, employment generation, social welfare and infrastructure development.

Presenting the budget, Satheesan said it would serve as the roadmap for welfare schemes to be implemented in the state over the next five years. He said the UDF government came to power with a clear public mandate and that the budget reflects its vision of addressing challenges through reforms, technology and investments in social and physical infrastructure.

The Chief Minister said the government aims to improve the health and education sectors by making maximum use of modern technology, creating more employment opportunities, ensuring the welfare of senior citizens and accelerating modern infrastructure development.

He noted that despite Keralam’s achievements in social development, key sectors have been facing challenges. Public health, education and social sectors that have earned global recognition are under pressure, while social development indicators have remained stagnant for years. Youth unemployment, he said, continues to be a major concern.

Highlighting measures already implemented despite financial constraints, Satheesan said the government had fulfilled key promises under the six Indira Guarantees, including free travel for women in KSRTC buses and the creation of a separate department for senior citizens. Honorariums for ASHA workers, anganwadi workers, helpers and teachers have also been increased. He added that stronger investments in health and education would help position Keralam as a preferred destination.

The Chief Minister also pointed to significant demographic changes in the state, including a declining share of young people and increasing migration abroad for employment. He stressed the need for a comprehensive study of these changes and said quality education and job opportunities must be created to make youth active partners in Keralam’s development.

Emphasising the need to adapt to evolving social and economic realities, Satheesan said the government would focus on improving facilities for senior citizens while promoting a “silver economy" by utilising their capabilities. He added that Keralam’s financial constraints and structural challenges cannot be addressed through conventional methods alone and that the government is committed to attracting large-scale investments through innovative approaches, generating resources for the exchequer and ensuring equitable wealth distribution.

As part of measures announced in the Budget, the government proposed a taxation framework for low-alcohol beverages. Low-alcohol beverages containing 0.5 per cent to 10 per cent alcohol by volume will attract a sales tax of 120 per cent, while beverages containing more than 10 per cent and up to 20 per cent alcohol by volume will be subject to a sales tax of 175 per cent.

The move follows amendments made under the Abkari Policy 2022-23, which allowed the sale of low-alcohol beverages in the state. Under the amended Foreign Liquor Rules, alcoholic drinks containing between 0.5 per cent and 20 per cent alcohol by volume, excluding beer and wine, were classified as “Low Alcoholic Beverages". The government said the revised tax structure is aimed at providing clarity in taxation under the Kerala General Sales Tax Act.

The Budget also unveiled “Mission Samudra", a major maritime initiative for which Rs 400 crore has been allocated. The project seeks to integrate Kerala’s 600-kilometre coastline, two international seaports, a container transhipment terminal, 17 non-major ports and other aquatic resources with the objective of positioning the state as a significant global maritime hub within the next five years.

Under the initiative, the government will formulate a comprehensive Kerala Maritime Policy to accelerate the development of four major non-major ports – Vizhinjam-Kovalam, Kollam, Beypore and Azhikkal. The policy will promote seaborne freight transport, port-led industries, logistics and allied shipping activities.

The government also plans to utilise land, buildings and other assets across the remaining 13 non-major ports to encourage maritime tourism, logistics, maritime industries, maritime legal education and the establishment of a maritime museum through public-private partnerships.

A phased development of a comprehensive water transport system interconnecting major and minor ports has also been proposed. The first phase will focus on freight movement, followed by passenger transport services, eventually linking the network with Kerala’s inland waterways.

In the tourism sector, the government announced the Pilgrimage Tourism Circuit Project connecting Arthunkal Basilica, Ambalappuzha Temple, Kakkazham Mosque, Mannarasala, Krishnapuram Palace, Mata Amritanandamayi Math and Ochira Temple.

The Budget also earmarked Rs 10 crore for Operation Toofan.

To support the public transport sector, the government announced a 50 per cent concession on quarterly tax for stage carriage buses. Quarterly taxes on All India Tourist Permit (AITP) buses have been reduced from Rs 2,000 per seat to Rs 900 per seat and from Rs 3,000 per sleeper berth to Rs 1,500. The measure aims to encourage more AITP buses to register in Kerala and improve inter-state travel facilities.

Further, the additional tax slab imposed on trailer vehicles weighing more than 20 tonnes has been removed, with the tax rate reduced to the level applicable to vehicles weighing more than 15 tonnes.

In the science and education sector, the government announced the establishment of the Jawaharlal Nehru Centre for Scientific Temper with an allocation of Rs 25 crore. The centre is intended to promote scientific awareness among students and support efforts to transform Kerala into a global knowledge hub.

An additional Rs 10 crore has been earmarked for the establishment of the Jawaharlal Nehru Scientific City.

According to the Budget estimates, Kerala’s revenue receipts for 2026-27 are projected at Rs 1,69,646.37 crore, while revenue expenditure is estimated at Rs 2,05,001.67 crore. The state’s revenue deficit is projected at Rs 35,355.30 crore.

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