Sources said preliminary work is in progress to construct the circular pipeline, which will connect all major drinking water sources in Chennai with distribution points.
| Photo Credit: B. JOTHI RAMALINGAM

After releasing the “Kerala’s Fiscal Health — A Status Report” (white paper), which raised serious concerns over the State’s rising debt burden while strongly criticising the previous Left government for alleged fiscal mismanagement, the new United Democratic Front (UDF) government on Thursday presented its maiden budget.

The budget estimates the debt-to-GSDP ratio to come down marginally to 33.5% in 2026-27, compared with 34.87% (actuals, 2024-25) or 34.26% (revised estimates, 2025-26).

This is not because debt is expected to fall — the budget in fact projects total outstanding debt to rise 11.6%, from ₹4.89 lakh crore to ₹5.46 lakh crore — but because of its optimistic outlook that GSDP would grow nominally by 14.15% and revenue receipts by 23.8%.

Even if the government’s optimistic projections come true, Kerala will indisputably remain among the States with the highest debt burden. As per the Reserve Bank of India’s (RBI) data, the debt-to-GSDP ratio for all States combined stood at 27.01% in 2024-25. The chart below shows the ten States with the highest debt-to-GSDP ratio in 2024-25.

However, a rather unique Kerala phenomenon, highlighted prominently by the white paper, is its “structural” problem of a high share of “committed expenditure”, which not only leaves little or no room for capital expenditure but also contributes to mounting revenue deficits.

Committed expenditure has three main components: salaries, pensions and interest payments on loans previously taken. The three together account for nearly 78% of the State’s revenue receipts, as per RBI’s data for 2024-25. The share is only 45.4% at the all-India level (excluding Union Territories).

The budget projects it at 72.14% for 2026-27, which would still be the second-highest in the country, after Punjab — whose economy is only about two-thirds the size of Kerala’s. The chart below shows committed expenditure as a share of revenue receipts in States whose GSDP was at least ₹5 lakh crore in 2024-25.

Of the total committed expenditure, salaries and pensions alone account for more than half of the State’s revenue receipts. The budget estimates salary and pension expenditure at ₹88,000 crore in 2026-27, nearly 52% of the estimated revenue receipts of ₹1.7 lakh crore.

The chart below shows how this trend has remained roughly the same in Kerala. The share of committed expenditure in total revenue receipts touched its peak of 81.2% in 2021-22, when the previous government cleared certain backlogs related to salaries and pensions and undertook some one-time COVID-19-related relief measures.

On committed expenditure being a crucial problem, the white paper noted: “The most direct structural explanation for Kerala’s treasury stress is the share of its revenue that is pre-empted before any discretionary decision.”

It further said: “The State spends almost 80% of its resources on salaries, pensions and interest, far more than many other states. It is not right to take taxes from the people and spend most of it on salaries and pensions… Now is the time for hard political decisions,” adding that measures such as increasing the retirement age and limiting pay commission revisions to once every ten years should be considered.

Yet, while the budget speech spelled out either measures or the intent to address most of the problems the white paper had highlighted, it was conspicuously silent on measures to address this “structural problem” — barring the announcement that the government would revamp the National Pension Scheme after reviewing the “ambiguities” in the Assured Pension Scheme announced by the previous government.

The silence is perhaps an acknowledgement of the difficulty in tackling the problem, and of the importance of such high allocations for salaries and pensions in achieving the considerable progress the State has made on human development indicators.

Economist R. Ramakumar cautioned against interpreting the figures solely as evidence of fiscal distress. “If you want to retain a welfare state idea, welfare state requires welfare workers,” he said, pointing out that Kerala employs significantly more teachers, nurses and other public-sector workers than most States.

“Kerala’s achievements are due to this particular kind of salaries that you end up paying,” he said.

Moreover, he said that while the figure of more than 75% highlighted in the white paper has “shock value”, a better parameter would be the share of committed expenditure in the State’s total revenue expenditure, rather than revenue receipts, which would bring the figure down to around 58-60%.

Economist Lekha Chakraborty, meanwhile, said this reflected public expenditure rigidity. “All that we can do is an episodic expenditure (sectoral) compression, given the committed nature of spending. While the state has shown revenue buoyancy, without meaningful public expenditure reforms, this pattern risks perpetuating revenue deficits and constraining Kerala’s ability to sustain its social model,” she added.

As the chart below shows, SOTR and overall revenue receipts have indeed shown notable growth. SOTR has, however, remained below committed expenditure. Moreover, their respective compound annual growth rates (CAGRs) between 2015-16 and the 2026-27 (budget estimates) show that committed expenditure has grown faster than the other two.

Tax buoyancy, meanwhile, has come down in the last few years. The chart below shows SOTR buoyancy, calculated as the ratio between the growth of SOTR and the growth of GSDP. A value above one indicates good buoyancy, while a value below one indicates the State’s inability to raise tax revenues in proportion to economic growth.

The budget speech and the projections for 2026-27 show that the new UDF government is relying on a swift turnaround in tax buoyancy and GSDP growth to help the State come out of the financial distress, while recognising that committed expenditure on salaries and pensions cannot be brought down, at least in the near future.

Published – June 20, 2026 08:13 am IST

After releasing the “Kerala’s Fiscal Health — A Status Report” (white paper), which raised serious concerns over the State’s rising debt burden while strongly criticising the previous Left government for alleged fiscal mismanagement, the new United Democratic Front (UDF) government on Thursday presented its maiden budget.

The budget estimates the debt-to-GSDP ratio to come down marginally to 33.5% in 2026-27, compared with 34.87% (actuals, 2024-25) or 34.26% (revised estimates, 2025-26).

This is not because debt is expected to fall — the budget in fact projects total outstanding debt to rise 11.6%, from ₹4.89 lakh crore to ₹5.46 lakh crore — but because of its optimistic outlook that GSDP would grow nominally by 14.15% and revenue receipts by 23.8%.

Even if the government’s optimistic projections come true, Kerala will indisputably remain among the States with the highest debt burden. As per the Reserve Bank of India’s (RBI) data, the debt-to-GSDP ratio for all States combined stood at 27.01% in 2024-25. The chart below shows the ten States with the highest debt-to-GSDP ratio in 2024-25.

However, a rather unique Kerala phenomenon, highlighted prominently by the white paper, is its “structural” problem of a high share of “committed expenditure”, which not only leaves little or no room for capital expenditure but also contributes to mounting revenue deficits.

Committed expenditure has three main components: salaries, pensions and interest payments on loans previously taken. The three together account for nearly 78% of the State’s revenue receipts, as per RBI’s data for 2024-25. The share is only 45.4% at the all-India level (excluding Union Territories).

The budget projects it at 72.14% for 2026-27, which would still be the second-highest in the country, after Punjab — whose economy is only about two-thirds the size of Kerala’s. The chart below shows committed expenditure as a share of revenue receipts in States whose GSDP was at least ₹5 lakh crore in 2024-25.

Of the total committed expenditure, salaries and pensions alone account for more than half of the State’s revenue receipts. The budget estimates salary and pension expenditure at ₹88,000 crore in 2026-27, nearly 52% of the estimated revenue receipts of ₹1.7 lakh crore.

The chart below shows how this trend has remained roughly the same in Kerala. The share of committed expenditure in total revenue receipts touched its peak of 81.2% in 2021-22, when the previous government cleared certain backlogs related to salaries and pensions and undertook some one-time COVID-19-related relief measures.

On committed expenditure being a crucial problem, the white paper noted: “The most direct structural explanation for Kerala’s treasury stress is the share of its revenue that is pre-empted before any discretionary decision.”

It further said: “The State spends almost 80% of its resources on salaries, pensions and interest, far more than many other states. It is not right to take taxes from the people and spend most of it on salaries and pensions… Now is the time for hard political decisions,” adding that measures such as increasing the retirement age and limiting pay commission revisions to once every ten years should be considered.

Yet, while the budget speech spelled out either measures or the intent to address most of the problems the white paper had highlighted, it was conspicuously silent on measures to address this “structural problem” — barring the announcement that the government would revamp the National Pension Scheme after reviewing the “ambiguities” in the Assured Pension Scheme announced by the previous government.

The silence is perhaps an acknowledgement of the difficulty in tackling the problem, and of the importance of such high allocations for salaries and pensions in achieving the considerable progress the State has made on human development indicators.

Economist R. Ramakumar cautioned against interpreting the figures solely as evidence of fiscal distress. “If you want to retain a welfare state idea, welfare state requires welfare workers,” he said, pointing out that Kerala employs significantly more teachers, nurses and other public-sector workers than most States.

“Kerala’s achievements are due to this particular kind of salaries that you end up paying,” he said.

Moreover, he said that while the figure of more than 75% highlighted in the white paper has “shock value”, a better parameter would be the share of committed expenditure in the State’s total revenue expenditure, rather than revenue receipts, which would bring the figure down to around 58-60%.

Economist Lekha Chakraborty, meanwhile, said this reflected public expenditure rigidity. “All that we can do is an episodic expenditure (sectoral) compression, given the committed nature of spending. While the state has shown revenue buoyancy, without meaningful public expenditure reforms, this pattern risks perpetuating revenue deficits and constraining Kerala’s ability to sustain its social model,” she added.

As the chart below shows, SOTR and overall revenue receipts have indeed shown notable growth. SOTR has, however, remained below committed expenditure. Moreover, their respective compound annual growth rates (CAGRs) between 2015-16 and the 2026-27 (budget estimates) show that committed expenditure has grown faster than the other two.

Tax buoyancy, meanwhile, has come down in the last few years. The chart below shows SOTR buoyancy, calculated as the ratio between the growth of SOTR and the growth of GSDP. A value above one indicates good buoyancy, while a value below one indicates the State’s inability to raise tax revenues in proportion to economic growth.

The budget speech and the projections for 2026-27 show that the new UDF government is relying on a swift turnaround in tax buoyancy and GSDP growth to help the State come out of the financial distress, while recognising that committed expenditure on salaries and pensions cannot be brought down, at least in the near future.

Published – June 20, 2026 08:13 am IST

Proposed high-speed rail corridors connect Hyderabad with three cities. The image is used for representative purposes only.
| Photo Credit: NAGARA GOPAL

Image used for representational purposes only.
| Photo Credit: Getty Images/iStockphoto

Budget 2026: Finance Minister Nirmala Sitharaman unveiled Modi 3.0’s Budget 2026 on Sunday, Feb. 1 with India Inc calling it a ‘non-event’ afetr no major announcements were made for income tax slabs or sector-specific allocations. According to Neelkanth Mishra, Chief Economist and Head-Global Research of Axis Bank, some of the macroeconomic and fiscal projections made in Budget 206-27 could pose a challenge for the government to tackle the financial system going further.

ALSO READ: Budget 2026: FM Sitharaman Allocates Rs 12.2 Lakh Crore For Capex

Axis Bank’s Neelkanth Mishra On Budget 2026

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Fiscal Projections In Budget 2026

”As a result of that, the gross borrwoing target has turned out to be higher than what bond markets expected and yields have actually gone up when they should have been going down,” he added. Explaining the fiscal math, Mishra said it is a two step process. ”I don’t see a challenge with fiscal math, by assuming 10% nominal GDP growth, even 10-and-a-half is possible. An improvement is likely in the coming year as the government has adequate buffer. Even if there is a signficant slowdown in global economy or if a war pushes up global crude oil prices, some buffers exist in the fiscal math itself,” he added.

Union Finance Minister Nirmala Sitharaman in Lok Sabha on February 1, 2026. Credit: Sansad TV

If you’re thinking of launching a YouTube, Instagram or any other social media channel in 2026, the Union Budget brings several indirect boosts for creators—even though it doesn’t mention “social media” explicitly. Here are the biggest takeaways for YouTubers, Instagram creators, streamers, podcasters, and digital storytellers. 

From talent pipelines to tourism storytelling, design capacity to government-led digital campaigns, here are the biggest takeaways from the Budget for YouTubers, Instagram creators, streamers, podcasters, and digital storytellers.

A Massive Talent Pipeline for the Creator Economy

One of the biggest, and most underhyped, announcements is the rollout of AVGC (Animation, VFX, Gaming and Comics) Content Creator Labs across 15,000 secondary schools and 500 colleges. This is India’s largest formal push to train students in digital storytelling, visual design and content creation skills.

For creators, this means a rapidly expanding pool of editors, animators, thumbnail designers, motion artists and creative collaborators who are trained early and at scale. The move signals that content creation is being treated as a core skill set for the future workforce.

As Jatin Varma, ex-CEO and founder of Comic Con India, put it, the Budget “embeds AVGC at the heart of India’s Orange Economy,” adding that early exposure to creative tools can build a more confident generation of storytellers, especially in spaces like comics and visual narratives.

Tourism, Culture and History Content in Focus

Budget 2026 also opens the door for creators working in travel, culture, history and education. The launch of a National Destination Digital Knowledge Grid aims to digitally document India’s cultural, spiritual and heritage sites, increasing demand for reels, short-form videos, explainers, documentaries and immersive walk-throughs.

The upskilling of 10,000 tourist guides through a structured program with IIMs further enables authentic creator-guide collaborations. Meanwhile, 15 archaeological sites, including Lothal, Dholavira, Sarnath and Leh Palace, will get immersive storytelling facilities—ready-made opportunities for creators who specialise in research-backed or visual-first content.

Design and Branding Get Stronger

Creators who rely on strong visual identity—whether for thumbnails, animations, channel branding or merch—stand to gain from the expansion of India’s design ecosystem. The Budget’s proposal to set up a new National Institute of Design in eastern India means more trained designers, UI/UX specialists and brand strategists entering the market.

Over time, that translates into better creative collaborators and more competitive pricing for design-intensive creator businesses.

Inclusion, Hospitality and Creator-Led Experiences

The Divyangjan Kaushal Yojana extends skill training to persons with disabilities across IT, AVGC and hospitality, broadening the talent pool for creators looking to build inclusive teams.

At the same time, the upgrade of the National Council for Hotel Management into a National Institute of Hospitality strengthens the ecosystem for food, travel, hotel and experience-based creators—especially those blending content with on-ground storytelling.

Budget allocations for media and publicity remain sizeable, with Rs 1,476.83 crore for information and publicity and Rs 2,750.19 crore for broadcasting. Historically, such spending filters down into digital campaigns, YouTube explainers, influencer-led awareness drives and social-first outreach — areas where creators increasingly get commissioned.

A Note of Caution: Gear May Get Costlier

One potential downside: customs exemptions on imported TV, camera, gaming and related hardware are set to lapse from April 1, 2026. For creators dependent on high-end cameras, monitors, VR gear or gaming equipment, setup costs could rise — making early upgrades worth considering.

As Prateek Maheshwari noted, the Budget “reinforces the link between education and job readiness, especially through AI-led learning and AVGC-focused training.” For creators launching in 2026, that alignment could make the difference between hustling alone — and building within a fast-growing creative economy.

ALSO READ: Budget 2026: Are You A Salaried Taxpayer? Here’s What Changes For You

Jefferies India has termed the Union Budget as a “pragmatic approach” with “no fireworks,” stating that while it does not offer immediate catalysts for equity markets, it lays the foundation for a stable medium‑term growth environment.

According to the brokerage, a key positive from the budget is the renewed focus on capex, driven by defence, adding this was facilitated by slower fiscal consolidation.

Jefferies noted that support to data centres and electronics component manufacturing was encouraging, reflecting the government’s continued push to strengthening the domestic technology and manufacturing ecosystem. However, it cautioned that the negative was potentially higher bond yields, which posed pressure on rate‑sensitive sectors. The brokerage also raised concerns over the hike in securities transaction tax (STT), calling it negative for rate sensitive stocks. It said higher STT signalled the government’s discomfort with elevated derivatives (F&O) trading volumes.

While the brokerage does not see any immediate trigger for equity markets, it said the government’s strategy is clearly aligned with long‑term export competitiveness, with export boost remaining the key policy direction.

Jefferies pointed to the large disinvestment budget, which indicated the IDBI bank divestment could be concluded in FY27.

On sectoral impact, Jefferies said the budget is positive for L&T and cement companies due to higher infrastructure capex, as well as for defence companies. It said companies like Amber and Syrma also stand to gain from higher allocations under the electronic manufacturing PLI (production linked incentive) scheme, Lodha on a data centre-related trigger, and PayTm owing to incentives for digital payments. On the flip side, it said the budget was negative for yield plays like NBFCs, capital market companies like BSE, Groww etc due to the STT hike, and for Dixon due to lower allocations under the mobile PLI scheme.

Finance Minister Nirmala Sitharaman presented a Rs 53.47-lakh crore Budget for 2026-27, up 7.7% from the current financial year ending March 31. As per the revised estimate, the size of the budget for the current fiscal is Rs 49.64 lakh crore, lower from Rs 50.65 lakh crore estimated in February 2025. The Budget for fiscal 2024-25 was at Rs 46.52 lakh crore.

ALSO READ: Tough Times Ahead For Dixon Tech After Budget 2026? Brokerages Say Yes; Pick Other EMS Stocks

Image used for representational purposes only.
| Photo Credit: Getty Images/iStockphoto