State Budget allots Rs 79 crore for startup sector; Rs 50 crore for New Gen tech

Trivandrum / June 19, 2026

Thiruvananthapuram, June 19: Kerala’s startup sector gets a major boost in the 2026-27 budget as Chief Minister VD Satheesan in his first budget presentation allots Rs 79 crore for the sector.

The Chief Minister also announced a Rs 50 crore fund that would give a fillip to Gen-Z startup ideas.

The overall budget allocation for the IT sector is Rs 434.40 crore.

In his budget presentation in the Kerala Assembly, Chief Minister Shri V D Satheesan said,“The creative abilities and technological excellence of the younger generation can be brought together to develop Kerala's startups, innovation hubs, research centres, and smart industries, while emphasizing digital ethics, privacy protection, cyber security, and core human values,”.

By striving to develop technological solutions to complex problems and create systemic changes, this generation will become an important driving force of the future economy and industries, he pointed out.

The first budget of the new government has also allotted Rs five crore for space sector in order to unlock massive employment opportunities for young engineers, spanning the entire value chain from upstream (satellite/rocket manufacturing) to downstream (data analytics) domains.

Strong encouragement will be extended to private satellite manufacturing and launching enterprises, with necessary land made readily available for their operations. Decisive steps will be taken to improve the operations of the Space Park, said the Chief Minister.

Furthermore, an amount of ₹10 crore is allocated to launch a Malayalam AI Initiative in order to fund an open Malayalam dataset and support the development of Malayalam AI models that innovators can take to market.

The budget has set an amount of Rs 10 crore for an incubation centre to create conditions for emerging entrepreneurs to establish business ventures with minimal risk. The incubation centre will provide management training, office facilities and seed capital assistance for startups and individual entrepreneurs to develop business enterprises.

Shri Satheesan also announced allocation of Rs 100 crore for the "Kerala MSME Growth Scheme’, a holistic initiative designed to provide targeted assistance for establishing 10,000 new MSME ventures across the State.

In his budget presentation, Shri Satheesan said, “Empowered by digital technology, e-commerce, Artificial Intelligence (AI), and advanced automation, our MSMEs are now fully equipped to penetrate global markets and compete effectively with multinational conglomerates.”

The government will offer robust tax incentives alongside institutional backing and encouragement to launch enterprises anchored in innovative technologies, he added.

“To guarantee entrepreneurial success, Revolving Fund, Technology Fund, and Challenge Fund will be made readily available to those facing financial roadblocks. The expertise of specialized techno-mentors and manage-mentors will be ensured to provide guidance in technical and management domains,” said the Chief Minister.

Another announcement in the budget is about Cyberpark at Kozhikode, which will be upgraded to the level of Infopark at Kochi and Technopark at Thiruvananthapuram.

Ends