Thiruvananthapuram: Finance Minister K.N. Balagopal presented the final full budget of the second Pinarayi Vijayan government in the Legislative Assembly today. Despite facing financial constraints, the budget places a strong emphasis on social welfare, infrastructure development, and relief for government employees.
Here are the major highlights and announcements from the Kerala Budget 2026:
6. 1. Major Relief for Government Employees & Pensioners
The budget addresses several long-standing demands of state government employees.
- Salary Revision: A new Pay Revision Commission has been appointed. The commission is directed to submit its report within three months.
- DA Arrears: Pending Dearness Allowance (DA) and Dearness Relief (DR) arrears will be cleared. One installment will be paid with February’s salary, and the remaining installments will be disbursed with the March salary.
- Assured Pension Scheme: The contributory pension system will be replaced by a new ‘Assured Pension’ scheme starting in April. This scheme guarantees a pension equivalent to 50% of the last drawn basic salary.
- Medisep 2.0: The health insurance scheme for employees, Medisep, will be relaunched with enhanced benefits starting February 1st. A similar model will be introduced for pensioners and cooperative sector employees.
- HBA Revival: The House Building Advance (HBA) scheme for employees will be revived.
