Kerala CM VD Satheesan said the state's fiscal position is "very vulnerable" and called for private investment. Presenting the 2026-27 budget, he unveiled plans to make Kerala a "Knowledge Valley" and boost industrial and welfare spending.
Keralam Chief Minister VD Satheesan on Friday said the state's fiscal position remains "very vulnerable" even as the government seeks to push private investment and strengthen development and welfare spending under the 2026-27 State Budget.
Speaking on the state's financial condition, CM Satheesan said there was no immediate plan to privatise public sector units, but acknowledged structural constraints in development spending. "There is no mention in the budget that we are going to privatise any public sector, but the government's fiscal situation is very vulnerable," he said. He further noted that limited fiscal space was affecting developmental priorities in the state. "We only have 23% of the money for development, welfare activities," Satheesan said, adding that private investment would be necessary to support growth and economic stability. "For better financial management and stimulating the economy, we will welcome private investment," he added.
Budget Roadmap: Towards a Knowledge Economy
The remarks come as the Keralam government unveiled a broad roadmap focused on higher education, healthcare, investment, research and welfare, with plans to transform the state into a global knowledge and innovation hub.
Education and 'Knowledge Valley' Initiative
Presenting the 2026-27 State Budget in the Assembly, the Chief Minister announced plans to develop Kerala as a "Knowledge Valley", aimed at positioning the state as a leading destination for higher education. The government also proposed special legislation to attract foreign universities and facilitate collaborations with top institutions, along with amendments to the Private University Bill. An allocation of Rs 100 crore has been made for the initiative.
Industrial and MSME Development
To boost industrial growth, the state will set up a data-driven "Invest Kerala" cell and an Investment Advisory Council, alongside a plan to launch 10,000 Micro, Small and Medium Enterprises (MSMEs).
Healthcare and Care Economy
In the healthcare sector, the government announced the "One Kerala Care Mission", a new Department for Senior Citizens, and caregiver certification programmes to strengthen the care economy.
Strategic Investments and Infrastructure
The budget also proposed Rs 5 crore support for startups in the space sector and the creation of a Research Park linking institutions and industry. Infrastructure allocations include Rs 200 crore for an Aviation Logistics Hub and Rs 50 crore for Wayanad Tribal University.
Additional initiatives include a comprehensive land management policy under "Land Reforms 2.0", a new land bank system, and the establishment of an International Maritime Museum and a Global Convention Centre at Kochi Airport to boost tourism and business connectivity.
The government said the overall focus of the budget remains on balancing welfare commitments with investment-driven growth to position Kerala as a global knowledge economy.
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