Palunku tells the story of an industrious farmer Monichan and his family, which consists of his wife Susamma, and his daughters Geethu and Neethu, whom he lovingly calls ‘Ponnu’ and ‘Kilunthu’. Monichan is happy with his life as a farmer and loves his family, his profession, nature and the people around him.
At a juncture in his life, he is forced to take his daughters to a school in the town, simply because the school in his village cannot accommodate his elder daughter, who is in fifth standard, as there are not enough students to run classes. Thus Geethu and Neethu join an English medium school. Monichan brings the children to school every morning and hangs around in town till evening to take them back. In the course of this routine, Monichan gets close to Soman Pillai, a shrewd lottery agent, who knows all kinds of short-cuts to earn money. Soman Pillai becomes Monichan’s advisor. Monichan buys a bicycle and the father and the daughters now travel to town and back on the bicycle. In the meantime Monichan joins a class conducted for elders and starts learning to read and write Malayalam as well as English. A minor accident makes Monichan shift over to the town along with his family. Once in town, Monichan finds himself entrapped in a vicious circle. He, with the help of Soman Pillai, begins to tread down the wrong path – lending out money, and doing things not entirely above board. His life changes slowly. He is no longer the naive farmer he used to be. Even his wife has changed, spending her time watching soap operas on TV and dreaming about modern household amenities. But fate has something else in store for them. They lose someone close to them