In poll-bound Kerala, big announcements and welfare sops mark 2026-27 State Budget

Kerala's 2026-27 Budget features major welfare initiatives, including free undergraduate education and enhanced pensions for government employees.

Presenting the final Budget of election-bound Kerala’s incumbent CPI(M)-led Left Democratic Front (LDF) government on Thursday (January 29, 2026), Finance Minister K.N. Balagopal unfurled a populist mix of big-ticket announcements and welfare sops, notably a proposal to make undergraduate education in Arts and Science colleges free, the 12th Pay Revision Commission and the Assured Pension Scheme with an April 1 launch date for government employees.

Mr. Balagopal’s Budget speech, the fourth lengthiest in the Kerala Assembly, featured a bevy of insurance schemes, wage hikes for scheme workers, and proposals for developing high-end development corridors for rare earth and defence-related industries.

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For government employees and pensioners, Thursday’s Budget speech is intended to bring cheer. Under the Assured Pension Scheme, employees will be eligible for 50% of the last basic pay as maximum pension. There will also be an option for shifting from the existing National Pension System (NPS) to the assured pension. The Pay Revision Commission will be asked to submit its report in three months’ time, the Finance Minister said. Thee remaining instalments of dearness allowance/dearness relief (DA/DR) will be paid in full. One DA instalment will be disbursed with the salary for February. The remaining instalments will be paid out with the salary for March.

A clutch of insurance schemes featured prominently in the Budget. The list includes an accident/life coverage for school students and autorickshaw and taxi workers, as well as a new health insurance initiative for families outside the ambit of the Karunya Arogya Suraksha Scheme. The Budget also assured a ‘Life Saver Scheme’ ensuring cashless treatment for road accident victims for the first five days.

The monthly wages of ASHA workers, pre-primary teachers, Anganwadi workers and Saksharatha Preraks have been enhanced by ₹1,000 each, and that of anganwadi helpers workers by ₹500. The daily wage of noon-meal workers in schools has been increased by ₹25.