Kanal Kannadi tells the story of today's society with the portraits of three strong female characters. Anamika (Shelly) who is a brilliant student from a poor family, gets admission to a medical college through the merit route. Ouseppachan is the Managing Director of the institution summons Anamika following the arrears that happened in paying the first semester fee in the college. Ouseppachan asks her to pay up or to quit, because this is not just an educational institution but also a commercial venture. Substantial amounts are collected as capitation fees, in these institutions, which do not favor students entering through the merit route, because such students cannot be charged any capitation fees.
This line of story takes its life from the recent 'Rajani' issue which shook the state on her suicide from the entrance commissioner buildings in the capital city. In our story too, Anamika who leaves the room insulted and devastated on rash comments from the head of the institute, commits suicide. Indumathy (Karthika) who is one among the many psychology students doing research into suicides of similar kind. Anamika sad fate becomes one of the subjects of her research and her findings, which invites media headlines clearly make itches in the topnotch of politics. Gerly Fernando (Manya) who is a Anglo Indian character and who is also faced with problems in her life as a popular model. Vivek Iyer (Indrajeet ) who is a computer genius, and who is madly in love with Gerly.