Summary of Kerala Budget 2025–26
- source -> kerala_budget_2025_26
Document: Budget in Brief 2025-26 by the Finance Department, Government of Kerala.
1. Overall Budget Size
For 2025–26, Kerala proposes:
| Item | Amount |
|---|---|
| Total Receipts | ₹1,98,582 crore |
| Total Expenditure | ₹1,98,582 crore |
| Revenue Receipts | ₹1,52,352 crore |
| Capital Receipts | ₹46,231 crore |
| Revenue Expenditure | ₹1,79,476 crore |
| Capital Expenditure | ₹19,106 crore |
| GSDP | ₹14.27 lakh crore |
The budget remains heavily revenue-expenditure driven, meaning most spending goes toward salaries, pensions, interest, welfare, and operational expenses rather than infrastructure creation.
2. Revenue Sources
A. State’s Own Tax Revenue — ₹91,515 crore
Main tax sources:
| Source | Amount |
|---|---|
| GST | ₹37,763 crore |
| Sales Tax/VAT | ₹33,591 crore |
| Motor Vehicle Tax | ₹7,397 crore |
| Stamp & Registration | ₹7,343 crore |
| State Excise | ₹3,150 crore |
GST and VAT together form the backbone of Kerala’s finances.
B. State Non-Tax Revenue — ₹19,146 crore
Major sources:
| Source | Amount |
|---|---|
| Lotteries | ₹14,121 crore |
| Mining & Metallurgy | ₹754 crore |
| Medical/Public Health Fees | ₹440 crore |
Kerala depends unusually heavily on lottery income compared to most Indian states. Lottery receipts alone are around 74% of non-tax revenue.
C. Central Transfers — ₹41,691 crore
Includes:
| Type | Amount |
|---|---|
| Share of Central Taxes | ₹28,617 crore |
| Grants-in-Aid | ₹13,075 crore |
3. Borrowing and Debt
New Borrowings
Kerala plans fresh borrowings and liabilities of:
| Item | Amount |
|---|---|
| Borrowings & Other Liabilities | ₹45,039 crore |
| Net Public Debt | ₹40,848 crore |
This means nearly ₹45,000 crore of spending depends on debt financing.
4. Fiscal Deficit and Revenue Deficit
Fiscal Deficit
Kerala’s fiscal deficit for 2025-26:
Fiscal Deficit = ₹45,038.52crore = 3.16%of GSDP
This is slightly lower than the revised estimate of 3.51% in 2024-25.
Revenue Deficit
Revenue deficit:
Revenue Deficit = ₹27,124.52crore
This means Kerala still spends far more on daily operations than it earns in normal revenue.
5. Kerala’s Total Debt
Outstanding debt projected for 2025-26:
Total Outstanding Debt = ₹4,81,997.62crore
Debt composition:
| Type | Amount |
|---|---|
| Internal Debt | ₹3.32 lakh crore |
| Central Government Loans | ₹17,200 crore |
| Provident Funds & Small Savings | ₹1.33 lakh crore |
Debt-to-GSDP ratio:
Debt/GSDP = 33.77%
6. Interest Burden
Interest payment alone:
| Year | Interest Payment |
|---|---|
| 2025-26 | ₹31,824 crore |
Interest consumes:
- 17.7% of total revenue expenditure
- 28.8% of state own revenue
This is one of Kerala’s biggest structural financial pressures.
7. Salaries and Pensions
Salary Expenditure
| Item | Amount |
|---|---|
| Salaries | ₹44,114 crore |
Pensions
| Item | Amount |
|---|---|
| Pension Payments | ₹29,460 crore |
Combined salary + pension burden:
₹44,114 + ₹29,460 = ₹73,574crore
This equals about 66.5% of Kerala’s own revenue.
8. Sector-Wise Spending
Largest Spending Areas
| Sector | Allocation |
|---|---|
| General Services | ₹87,003 crore |
| Social Services | ₹61,764 crore |
| Economic Services | ₹33,166 crore |
| Grants to Local Bodies | ₹15,980 crore |
9. Education and Health
Education
Total education allocation:
| Sector | Amount |
|---|---|
| Education, Sports & Culture | ₹25,926 crore |
Health
| Sector | Amount |
|---|---|
| Health & Family Welfare | ₹10,580 crore |
Kerala continues prioritizing social-sector expenditure more than many Indian states.
10. Agriculture and Rural Development
| Sector | Allocation |
|---|---|
| Agriculture & Allied Activities | ₹7,702 crore |
| Rural Development | ₹5,949 crore |
| Irrigation & Flood Control | ~₹462 crore |
11. Local Self Government Funding
Funds devolved to local bodies:
| Category | Amount |
|---|---|
| Expansion & Development | ₹9,215 crore |
| Maintenance | ₹4,188 crore |
| General Purpose Fund | ₹2,577 crore |
Total:
₹15,980.49 crore
Largest share goes to Grama Panchayats.
12. Capital Expenditure
Capital outlay for infrastructure/assets:
| Item | Amount |
|---|---|
| Total Capital Outlay | ₹16,938 crore |
Major infrastructure sectors:
- Transport
- Rural development
- Water supply
- Urban development
13. Long-Term Fiscal Trends
Compared with 2010-11:
| Item | 2010-11 | 2023-24 |
|---|---|---|
| Total Revenue | ₹30,991 crore | ₹1,24,486 crore |
| Total Debt | ₹78,673 crore | ₹3,91,934 crore |
| Interest Payments | ₹5,690 crore | ₹26,986 crore |
Kerala’s economy and revenues have grown significantly, but debt and interest obligations have also expanded sharply.