Kerala State Budget 2025-26 Analysis
Budget EstimateTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Kerala FY 2025-26
Kerala State Budget 2025-26 Budget at a Glance
Total Receipts
Rs 1.54 lakh crore
+10.7%
Total Expenditure
Rs 1.99 lakh crore
+9.0%
Fiscal Deficit
3.2%
Rs 45,039 crore
Capital Expenditure
Rs 17,913 crore
+14.4%
Tax Revenue
Rs 93,000 crore
+9.6%
Interest Payments
Rs 31,824 crore
16% of expenditure
Kerala Revenue Receipts 2025-26
Own tax revenue vs non-tax revenue breakdown
Kerala Expenditure Breakdown 2025-26
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Top 10 Departments by Allocation
Fiscal Deficit as % of GSDP โ Kerala 2025-26
The fiscal deficit for Kerala in 2025-26 is 3.2% of GSDP (Rs 45,039 crore), reflecting the state's borrowing needs to fund development programmes.
States are expected to maintain fiscal deficit within 3% of GSDP as per the FRBM Act. Kerala is maintaining fiscal discipline close to the recommended limit.
Interest payments at Rs 31,824 crore consume 16.0% of total expenditure.
Kerala State Budget 2025-26 โ Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 3.09 lakh crore | 100% |
| 1. Revenue Receipts | Rs 1.54 lakh crore | 49.6% |
| a. Own Tax Revenue | Rs 93,000 crore | 30.1% |
| b. Non-Tax Revenue | Rs 20,000 crore | 6.5% |
| B. Total Expenditure | Rs 1.99 lakh crore | 100% |
| 1. Revenue Expenditure | Rs 1.81 lakh crore | 91.0% |
| 2. Capital Expenditure | Rs 17,913 crore | 9.0% |
| of which: Interest Payments | Rs 31,824 crore | 16.0% |
| C. Fiscal Deficit | Rs 45,039 crore | 3.2% of GSDP |
Source: Kerala State Budget Documents via PRS India. All figures in Indian Rupees.
Kerala Department-wise Expenditure 2025-26
Top departments by allocation in Kerala for 2025-26
| Department โ | Revenue โ | Capital โ | Total โ | Share |
|---|---|---|---|---|
1. Education | Rs 28,000 crore | Rs 2,000 crore | Rs 30,000 crore | 15.1% |
2. Health & Family Welfare | Rs 16,000 crore | Rs 2,500 crore | Rs 18,500 crore | 9.3% |
3. Social Welfare | Rs 14,000 crore | Rs 1,500 crore | Rs 15,500 crore | 7.8% |
4. Rural Development | Rs 10,000 crore | Rs 2,500 crore | Rs 12,500 crore | 6.3% |
5. Police & Home | Rs 9,000 crore | Rs 1,200 crore | Rs 10,200 crore | 5.1% |
6. Agriculture & Allied | Rs 8,000 crore | Rs 1,500 crore | Rs 9,500 crore | 4.8% |
7. Transport & Roads | Rs 5,000 crore | Rs 3,500 crore | Rs 8,500 crore | 4.3% |
8. Urban Development | Rs 6,000 crore | Rs 2,000 crore | Rs 8,000 crore | 4.0% |
9. Water Supply & Sanitation | Rs 4,500 crore | Rs 3,000 crore | Rs 7,500 crore | 3.8% |
10. Energy | Rs 5,500 crore | Rs 1,500 crore | Rs 7,000 crore | 3.5% |
Kerala Budget 2025-26 Analysis & Highlights
Key Highlights
- Total expenditure budgeted at Rs 2,10,000 crore โ high for a state of 3.5 crore population.
- Fiscal deficit at Rs 31,000 crore, approximately 3.5% of GSDP โ above FRBM target.
- Revenue deficit persists at Rs 18,000 crore, reflecting chronic current account stress.
- Outstanding debt approaches Rs 4,00,000 crore โ highest debt-to-GSDP ratio among large states at 37%.
- Interest payments at Rs 35,000 crore consume over 22% of revenue receipts.
- Health expenditure at Rs 18,000 crore sustains Kerala's best-in-class public health system.
- Education spending at Rs 25,000 crore โ highest per capita among all states.
- K-FON (Kerala Fibre Optic Network) receives Rs 2,000 crore for internet connectivity.
- Remittance-dependent economy: NRI deposits exceed Rs 2 lakh crore, driving consumption tax base.
- Social security pensions cover 55 lakh beneficiaries at Rs 7,000 crore annually.
- KIIFB (infrastructure financing) off-budget borrowings add Rs 40,000 crore to effective debt.
Compare Kerala Budget โ Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2021-22 | 2022-23 | 2023-24 | 2024-25 | 2025-26 |
|---|---|---|---|---|---|
| Total Expenditure | โ | โ | โ | Rs 1.82 lakh crore | Rs 1.99 lakh crore |
| Revenue Receipts | โ | โ | โ | Rs 1.39 lakh crore | Rs 1.54 lakh crore |
| Capital Expenditure | โ | โ | โ | Rs 15,663 crore | Rs 17,913 crore |
| Fiscal Deficit (% GSDP) | โ | โ | โ | 3.4% | 3.2% |
| Own Tax Revenue | โ | โ | โ | Rs 84,884 crore | Rs 93,000 crore |
Columns showing "โ" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Kerala State Budget 2025-26
The Kerala state budget is the annual financial plan presented in the state legislature. It covers all revenue receipts, expenditure allocations across departments, and fiscal deficit management. State budgets are critical because states handle key development areas including education, health, agriculture, and infrastructure.
Kerala Revenue Sources
State revenue comes from three sources: own tax revenue (state GST, stamp duty, excise, vehicle tax), non-tax revenue (fees, fines, interest), and transfers from the Centre (share of central taxes as per Finance Commission recommendations, plus grants-in-aid for specific schemes).
Fiscal Deficit and State Borrowing
Under the FRBM framework, states target a fiscal deficit of 3% of GSDP. States can borrow from the market via State Development Loans (SDLs), and the central government also provides loans. The RBI manages the borrowing calendar for states to ensure orderly market conditions.
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Compare Kerala with other states
Side-by-side comparison of fiscal metrics across Indian states