From economy to a careful balancing act: These are the top 5 challenges for new Kerala Chief Minister VD Satheesan

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VD Satheesan was sworn in as Kerala's Chief Minister, marking Congress's return to power after ten years. While there is optimism among party workers, challenges remain, including cabinet formation controversies and economic issues that the new government must address.

Congress leader VD Satheesan took oath as the new Chief Minister of Kerala on Monday, with many describing the moment as the start of a new era in the state. That is because the Congress is returning to power in Kerala after a ten-year gap, and there is considerable optimism among the rank-and-file party workers about fulfilling the promises made in the election manifesto. As Satheesan takes charge as the Chief Minister of Kerala, a post held in the past by Congress stalwarts like K Karunakaran, AK Antony and Oommen Chandy, he also faces several challenges that he has to address. Here are some of them.

Holding the party together

Despite a clear mandate, with the UDF winning 102 out of the 140 seats in the assembly elections, the Congress had a tough time deciding on its Chief Minister for Kerala. While Satheesan, who was the Leader of the Opposition in the previous assembly and led the party’s election campaign, was the popular choice for the post, matters became complicated after AICC General Secretary KC Venugopal and veteran leader Ramesh Chennithala also staked claims for the post. After several days of back-and-forth discussions, the Congress leadership on Thursday officially announced Satheesan as its CM pick.

But the factionalism is far from settled as loyalists of Venugopal and Chennithala have bagged most of the 11 cabinet posts the Congress has in the Satheesan government, leaving him with little room.

A tough balancing act

The Indian Union Muslim League (IUML), the second-largest party in the UDF, has been given an unprecedented five cabinet posts. The BJP and several Hindu groups have alleged communal appeasement and claimed that the Congress has "surrendered to Islamists."

While IUML got five cabinet posts, the influential Latin Catholic Church and the Orthodox Church in Kerala are miffed over not having representation in the Satheesan government. The Latin Church was hoping to see Kovalam MLA M Vincent in the cabinet, while the Orthodox Church wanted Chandy Oommen, the son of former Kerala CM Oommen Chandy, in the government.

Another influential group that has been left disappointed by the cabinet formation is the Sivagiri Mutt in Varkala. The Sivagiri Mutt, founded by Sree Narayana Guru, was initially seeking six cabinet posts for the Ezhava community. After a meeting with Satheeshan, a representative of the Mutt, said nine persons in the UDF associated with Sree Narayana organisations have won the election, and at least 3-4 of them should be made ministers.

Managing the economy

The government has constituted a high-level special committee to prepare and release a comprehensive white paper on the state's current financial situation. Earlier, senior Congress leader AK Antony had said that the public should remain patient regarding the implementation of some of the popular policies in the Congress manifesto as “Kerala’s economy was bankrupt."

However, hours after assuming office, Satheesan announced free travel for women on KSRTC buses, the creation of a dedicated department for elderly welfare, and a ₹3,000 increase in the honorarium of ASHA workers. He further announced a ₹1,000 monthly hike for Anganwadi workers and helpers, school cooking staff, pre-primary teachers and ayahs.

Kerala’s ticking population time bomb

Due to a combination of factors, including low fertility rate, increased outward migration and longer life expectancy, Kerala is witnessing a population decline. The state has a Total Fertility Rate (TFR) of 1.35, far below the replacement level of 2.1. While the birth rates have plummeted, the average life expectancy in Kerala is 75.1 years, which means the elderly live much longer in the state than the national average. Making matters worse is the recent increase in outward migration of Kerala’s working-age population. Keeping this in mind, the new government has constituted a new department for old aged persons.

Making Kerala business-friendly

Thanks to left governments and strong labour rules, for a long time, Kerala had a reputation for not being an investor-friendly state. Though this has changed in recent years and the state has improved its position in the Ease of Doing Business rankings, it continues to fail in attracting large investments. If the Satheesan government has to turn around the ‘bankrupt economy’ of the state and implement its populist schemes, Kerala will have to attract more investment beyond its traditional strengths, including tourism,

Key Takeaways

VD Satheesan must attract new investments to improve Kerala's economy.
Factionalism within the Congress party poses a challenge to Satheesan's leadership.
Kerala's demographic changes require targeted policies for the elderly and declining birth rates.

About the Author

Bobins Vayalil Abraham

Bobins loves telling the human side of all stories, from the intersection of geopolitics, international relations, and conflicts around the world. In his nearly one-and-a-half-decade career as a journalist, Bobins has covered South Asia, the Middle East, and North America, from elections to mass protests and conflicts. Bobins has also done extensive reporting on environmental issues, climate change, and sustainability, focusing on solutions and people working to make the planet a better place to live. In 2018, Bobins was awarded by Times Internet for the impact of his story on Delhi tree cuttings. Bobins also loves telling the stories of Indian startups and the journey of their founders. Total Years of Experience: 14 Years of experience at LM: Bobins has been a part of Live Mint since February 2026 Interests: When he is not tracking conflicts, Bobins loves to cook, travel across India, click photos, and watch documentaries on history. Past Experience: Before joining Live Mint, Bobins worked with The Indian Express, where he led the Global Breaking News coverage, Indiatimes, where he led the news team, covering everything trending, ANI, where the focus of his coverage was South Asia, and NBS News. Current Role: Bobins is currently working as an Assistant Editor at Live Mint.

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