K N Balagopal’s budget speech for 2026-27 has drawn greater attention than any of the five he had delivered before. The major reason is obvious: assembly elections are close. Hence, it is also a step towards preparing the LDF election manifesto -- this is the second Pinarayi Vijayan Government’s final budget.
This exercise also happened in the backdrop of the local body polls, held in December, where the government had to face huge anti-incumbency sentiment, as the results indicate. The LDF government had never in its history faced a huge setback as far as elections to rural bodies were concerned. Therefore, all stakeholders of civil society were enthusiastic about the latest budget presentation. Actually, the budget this time can be considered a lame-duck exercise as the government has to seek a fresh mandate within a short span of less than three months.
Can budget influence electoral politics? The immediate answer is certainly positive, since it appeals to a wide variety of voters: 1) those dependent on welfare schemes; 2) the middle class, particularly as many proposals affect daily lives; 3) the organised sector comprising government and semi-government officers and workers, industrial workers, members of various trade unions and service organisations; 4) women, as a class, are also interested in following new proposals as they are connected to their ups and downs, especially those related to the prices of essential commodities.
There is a fifth sector too -- the upper class whose interests span the areas of taxes and initiatives for revenue generation. Since private sector investment and trade development are crucial in Kerala, the business classes too were looking forward to the budget. On the whole, there was high curiosity.
Usually, the focus is broadly on three areas: welfare policies, development-oriented policies, and revenue generation proposals. Indeed, there were little surprises there, as the LDF government’s approach is fairly known. Over the past five years, the government not only tried to raise revenue generation and attract investment but also attempted to broaden welfare and developmental projects.
But the process was far from being easy. Amid charges of corruption and extravaganza, the government tried to ensure that development milestones are achieved. But on the welfare front, there was much to be desired.
The budget did announce a series of reforms and attempted to satisfy the middle class and the organised sector.
The Pension Assurance Plan, for instance, would appeal to a large number of government employees who were dissatisfied with the current pension plan. Also, the assurance regarding payment of Dearness Allowance arrears, recommendation for a Pay Commission, and hike in pension for journalists, librarians, and people suffering from prolonged sickness, etc are likely to be influential.