Kerala’s 2026-27 budget stresses fiscal realism over big spending. Revenue is expected to rise to ₹1.83 lakh crore, led by better state tax and non-tax income. Though central tax shares keep pace, grants-in-aid have dropped, tightening finances. Kerala’s own revenue now funds just over half of its revenue expenses, spotlighting budget pressures. Total spending stands at ₹2.40 lakh crore, about 14% of the State’s GSDP. Most funds go to revenue expenses; capital spending is ₹19,451 crore. The fiscal deficit is kept within 3.40%, meeting fiscal responsibility rules. With a high elderly ratio of 30%, the budget reflects demographic needs. Kerala’s Elderly Budget totals ₹46,236 crore, nearly 20% of the entire budget. Social welfare pensions alone get ₹14,500 crore. The State also offers ₹30 crore subsidies for old-age homes and launches the KFC scheme giving senior citizens loans up to ₹20 crore at 3% interest to boost entrepreneurship. Women get a strong focus with a ₹5,587 crore gender budget. Programs like Chief Minister’s Sthree Suraksha Scheme (₹3,820 crore), Connect to Work, and skill centres aim to increase women’s jobs, especially in informal sectors. Honorariums for ASHA and Anganwadi workers have risen, with helpers and cooks also getting pay hikes. Women’s film directors will get ₹7 crore support. The Work Near Home program will expand with ₹150 crore, encouraging more female workforce participation. Climate risks receive attention too. Houses for 2024 Wayanad landslide victims will soon be ready. The ₹75 crore Kuttanad Package tackles frequent flooding and livelihood issues. Flood control in Kuttanad gets ₹50 crore; coastal development has ₹153 crore due to rising floods. A ₹100 crore fund is set for human–wildlife conflict projects. Kerala faces a big fiscal challenge as an ageing state with limited funds. The budget calls for more central help factoring elderly population numbers for better resource sharing. Healthcare strength and longer working lives are priorities. Kerala’s New Innings program supports this. Increasing women’s work participation is vital to balance an ageing workforce, with budget plans well aligned to this goal. The author is an Assistant Professor at Gulati Institute of Finance and Taxation (GIFT).