Kerala’s development strategy highlights green growth, but allocations fall short | Data

In recent years, Kerala has framed its development strategy around equity and environmental protection. Between 2021-22 and 2026-27, it anchored its State budgets to the pillars of a knowledge economy and green growth. To increase the profile of sectors that have, across States, often faced neglect, the State also introduced a separate environment budget in 2024 and a comprehensive research and development (R&D) budget in 2025.

However, the commitments in budget documents are not matched by allocations to environmental protection and research. In fact, the State’s fiscal structure and political incentives prevent it from translating its priorities into sustained investments and effective governance.

The allocation to Scientific Services and Research grew from ₹165.4 crore in 2022-23 to ₹288.6 crore in 2026-27 — a nominal increase of 74% over four years but less considerable (coming to a CAGR of 15%) after accounting for inflation and the State’s strong GSDP growth. Indeed, Kerala’s total R&D spending, after bringing existing departmental expenses together, as a fraction of its GSDP is less than half of India’s 0.6% of GDP, a figure already considered inadequate.

The ‘Ecology and Environment’ head received ₹27.8 crore in 2026-27; the Department of Environment and Climate Change, ₹10.82 crore; the Kerala State Biodiversity Board, ₹13 crore; and the Climate Adaptation Mission, ₹1 crore. These are all token amounts or close to that. The ‘green’ spending in the 2026-27 budget (₹947.89 crore) is again less than 0.5% of total State expenditure. And much of it is existing spending that it has relabelled ‘green’.

Around 71% of Kerala’s revenue receipts go towards salaries, pensions, and interest payments — the third highest among States. Capital expenditure is only 8% of total spending. Remittances also exceed 20% of the State’s GSDP, leaving its economy vulnerable to external shocks. Overall, the State has limited fiscal space for new priorities.

In this setting, the goal becomes to protect politically sensitive sectors and to dilute long-term public goods. And scientific research and environmental protection in particular lack organised constituencies even as their costs are immediate.

For example, in 2011, the Gadgil Committee recommended designating 64% of the Western Ghats as ecologically sensitive areas (ESA). The Kasturirangan Committee then reduced the extent of ESA to 37%, limiting restrictions to harmful industries and mining. Finally, the Kurian Committee removed another 1,197 sq. km, bringing the final extent to roughly 24%. Both the LDF and the UDF, mindful of the political weight of farming communities and owners of plantations in the Western Ghats districts, supported this reduction.

Weaknesses in how the State evaluates, regulates, and coordinates institutions reinforce these constraints. For example, the State has not evaluated allocations to the Kerala State Council for Science, Technology and Environment (KSCSTE) against patents, publications, technology transfers or policy impact. It established a standard operating procedure for the Brahmapuram landfill — built on a wetland and receiving unsegregated waste without regulatory consent from 2010 — only after the landfill suffered a large fire in 2023. And while the 2026-27 budget allocated ₹100 crore to a ‘Rare Earth Critical Minerals Mission’, KSCSTE, the body that directs the State’s science policy and funds its network of research institutes, received only ₹87 crore in the same budget. In other words, the Mission’s allocation exceeded that of the institution meant to govern it.

Kerala has an educated workforce and genuine strategic assets in sectors such as rare-earth minerals and renewable energy. These include the Green Hydrogen Valley and the KERA project, to support climate-resilient agriculture. However, a knowledge economy also needs sustained public investment and missions and institutions that are better coordinated. The State’s prevailing fiscal structure and policy choices don’t support these conditions.