
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:
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.
2. Infrastructure: K-Rail Stance & New High-Speed Corridor
- K-Rail (SilverLine): Finance Minister Balagopal clarified that the government has not abandoned the K-Rail project. He stated the government is not adamant about the name or specific technology but insists that a north-south high-speed rail corridor is essential for the state.
- RRTS Project: In parallel, the budget proposed a Regional Rapid Transit System (RRTS) connecting Thiruvananthapuram to Kannur. An amount of ₹100 Crore has been allocated for preliminary works to connect city metros.
- Vizhinjam Port: ₹1000 Crore will be invested through KINFRA for land acquisition and infrastructure development at Vizhinjam.
3. Health & Social Welfare
- Free Trauma Care: The government announced free treatment for accident victims for the first 48 hours (extendable up to 5 days) in government and selected private hospitals. ₹15 Crore has been allocated for this.
- New Health Insurance: A new health insurance scheme will be introduced for families not covered under the Karunya scheme, with an allocation of ₹50 Crore.
- Menopause Clinics: ₹3 Crore has been allocated to start Menopause Clinics in all District Hospitals.
4. Honorarium & Wage Hikes
- Asha & Anganwadi Workers: A hike of ₹1000 has been announced for the honorarium of Asha workers, Anganwadi workers, Pre-primary teachers, and Literacy Preraks.
- Anganwadi Helpers: A hike of ₹500.
- School Cooks: Daily wages for school cooking staff increased by ₹25.
- Journalists & Caregivers: Journalist pension hiked to ₹13,000. The monthly allowance for caregivers of bedridden patients has been increased from ₹600 to ₹1000.
5. Education & Students
- Nutrition: Milk and eggs will now be provided to Anganwadi children on all working days (₹80.90 Crore allocated).
- Uniforms: ₹150 Crore allocated for free uniforms for government school students.
- Scholarships: ₹130.78 Crore allocated for OBC educational scholarships.
6. Other Key Announcements
- Nativity Card: To address concerns regarding SIR and CAA/NRC among minorities, the government will introduce a ‘Nativity Card’ through new legislation.
- Life Mission: A massive allocation of ₹1497.27 Crore for the Life Mission housing project.
- MLA Funds: MLAs can now propose projects worth up to ₹7 Crore.
- Cinema: ₹7 Crore allocated specifically for women directors to produce feature films.
- Green Mobility: A subsidy of ₹40,000 for auto-rickshaw drivers to purchase eco-friendly electric autos.
Political Context: In his budget speech, the Finance Minister strongly criticized the Central Government, accusing it of encroaching upon the financial rights of states and attempting to undermine federalism. He specifically noted that the Centre is slashing the state’s tax share and borrowing limits.























