We too have big budget films though not to the extent of Telugu or Tamil. Many big films have done well at B. O too like lucifer, kurup, bheeshmaparvam,.
Tax incentives yes but now after GST everywhere it's more or less same. To be frank we had 6 box office hits both low budget and big budget this year. Other South Indian industries too have only that many hits or even lesser.
Malayalam industry is not as pathetic as you make out to be. It's doing much better than many other Indian film industries
We have the biggest overseas market after Tamil and Telugu in South India.
All we lack is a Pan Indian film which comes only once a blue moon.
We have a big list of big projects under production also - Barroz, Aadujeevitham etc and many big projects which are about to start shoots.
what more do you need