Nevertheless, Kerala has seen a notable increase in its tax revenue. The state’s tax revenue as a share of total revenue receipts stands at 61.22 per cent, compared to the national average of 50 per cent.

Similarly, Kerala’s own revenue share has reached 74.5 per cent, significantly higher than the national average of 58.4 per cent for 2024-25 (BE). Despite fiscal constraints, the budget size has steadily expanded—from Rs 66,992 crore during the previous UDF government (2011-2016) to Rs 1,15,435 crore in the first LDF term. Over the past four years, this has further risen to Rs 1,66,075 crore, reaching Rs 1,98,582 crore in the latest budget.

Kerala is now poised for a transformative leap forward, anchored in a new development model based on “knowledge, investment, and compassion-driven development.”

One of the key responses to conservative fiscal policies was the establishment of the Kerala Infrastructure Investment Fund Board (KIIFB) to enhance capital expenditure. The government’s commitment to social welfare has also led to a 2.5-fold increase in social security pensions, now set at Rs 1,600 per month.

This vision extends to fostering an innovation-driven economy through initiatives led by the Kerala Development and Innovation Strategic Council (K-DISC).

The creation of Space Park, Science Park, Fab Lab, an Innovation Centre for Graphene, Digital University, and Blockchain Academy highlights Kerala’s push towards becoming a hub for Industry 4.0 technologies such as artificial intelligence, the Internet of Things, blockchain, and robotics.