Kerala Budget 2026: No new taxes, focus on development projects

THIRUVANANTHAPURAM: Chief Minister V.D. Satheesan presented a new-age budget in the Assembly, promising a new direction for development without imposing new taxes. The biggest highlight of the budget is ‘Mission Samudra’, a project planned with private participation. The budget does not introduce any new taxes. It includes the launch of the Rs 25 lakh Oommen Chandy Health Insurance Scheme. However, there are no major welfare announcements such as an increase in social security pensions or clearance of pending DA arrears. The government also announced major changes to KIIFB.

Budget bites
Starter- Electric vehicle road tax reduced

• Vehicles up to Rs 10 lakh: Tax reduced from 5% to 3%
• Vehicles between Rs 10 lakh and Rs 15 lakh: Tax remains at 5%
• Vehicles between Rs 15 lakh and Rs 20 lakh: Tax reduced from 8% to 5%
• Vehicles between Rs 20 lakh and Rs 30 lakh: Tax remains at 10%
• Vehicles between Rs 30 lakh and Rs 40 lakh: Tax remains at 10%
• Vehicles above Rs 40 lakh: Tax increased from 10% to 15%

Main dishes
1. Mission Samudra

• Vizhinjam will be the centre of the project.
• The plan will connect 17 ports across Kerala.
• Allocation: Rs 400 crore

2. Southern Economic Corridor

• The project will cover Alappuzha, Kollam, and Thiruvananthapuram districts.
• It aims to use mineral resources, including black sand.
• Allocation: Rs 100 crore

3. Aviation Hub

• Focus on logistics and tourism development.
• Allocation: Rs 200 crore

Side dishes

• Renewable energy projects: Rs 100 crore
• MSME Growth Scheme: Rs 100 crore
• Kerala Knowledge Valley: Rs 100 crore
• Gen AI and New Generation Technology: Rs 50 crore
• Maritime Museum: Rs 50 crore
• Kerala Research Park: Rs 50 crore

Major announcements

• Light Metro projects in Thiruvananthapuram and Kozhikode
• 50% tax relief for private buses
• Government employees will receive DA/DR without arrears
• Medisep and contributory pension schemes will be revised
• Pensioners will receive relief without pending dues
• Rs 10 crore allocated as initial support for the Rs 25 lakh Oommen Chandy Health Insurance Scheme
• Rubber support price increased to Rs 250
• Land titles will be provided to all coastal residents
• Fair value of land will be revised
• Football stadium to be built in Malabar
• Cinema will get industry status
• J.C. Daniel International Film City to be established in Kochi
• M.T. Cultural Park to be set up in Kozhikode
• Johnson Master Music Academy to be started in Thrissur
• Memorial for Salim Kumar to be built in Ernakulam
• Kerala to become a Green Hydrogen Hub
• ‘Brand Kerala’ initiative to be launched
• College campuses will be made more women-friendly
• Kerala Disaster Resilience Centre to be established
• Endosulfan victims will be supported
• Cancer centre to be started in Malappuram
• Sabarimala, Guruvayur, Kottiyoor, and Thiruvallam temples will be developed on the Tirupati model
• Pilgrimage tourism circuit covering Arthunkal, Ambalappuzha, Kakkazham Palli, Mannarasala, Krishnapuram, Mata Amritanandamayi Math, and Oachira Temple

UDF government cuts previous LDF budget figures

The revised budget estimates reduced the revenue and expenditure figures from the budget presented by the previous government in January.

Revenue receipts: Rs 1,69,646.37 crore (down by Rs 13,325.73 crore)
Revenue expenditure: Rs 2,05,001.67 crore (down by Rs 12,557.09 crore)
Revenue deficit: Rs 35,355.30 crore (increase of Rs 768.64 crore)
Public debt: Rs 52,364.13 crore (increase of Rs 985.64 crore)

The annual plan size has also been reduced from Rs 35,750 crore to Rs 30,370 crore.