Explained | Kerala’s mounting public debt
The Hindu
Kerala’s public debt has almost doubled in the last seven years, reaching ₹3,32,291 crore in March 2022
The story so far: Over the past few months, Kerala’s mounting debt liabilities have been brought into sharp focus with the Reserve Bank of India, the Comptroller and Auditor General (CAG), and the opposition Congress-led United Democratic Front (UDF) flagging the issue.
The State’s financial situation was recently highlighted by Kerala Finance Minister K.N. Balagopal in his sharp response against a slew of Central financial policies: cutting the fiscal deficit grant by ₹7,000 crore; discontinuation of the Goods and Services Tax (GST) compensation worth around ₹12,000 crore; and a proposed move to consider the “off-budget” borrowings of State government entities such as the Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Ltd (KSSPL) as part of the State debt when fixing the State’s net borrowing ceiling.
Also Read: The poor state of India’s fiscal federalism
Here is a breakdown of Kerala’s public debt situation:
In June, the State Government informed the State Assembly that the cumulative debt of the State, as of March 2022, stood at ₹3,32,291 crore. This is a big leap from ₹1,89,768.55 crore in 2016-17. And according to the CAG, the ratio of public debt to the Gross State Domestic Product (GSDP) has risen from 20.43% in 2019-20 to 27.07% in 2020-21.
State finances have, in recent years, been marked by a steep rise in revenue expenditure, which has gone up from ₹91,096.31 crore in 2016-17 to ₹1,23,446.33 crore in 2020-21. Committed expenditure on interest payments, salaries, pensions etc. form a significant portion of this spending.
In the latest audit report on State Finances, the CAG advised the State to closely monitor debt sustainability and make ‘‘earnest efforts’‘ to maintain a healthy debt-GSDP ratio. Open market loans constituted 54% of the total fiscal liabilities of the State. The committed liability of the Government as a percentage of the revenue expenditure rose from 61.22% in 2016-17 to 68.01% in 2019-20.
Sadaoui sparkles as Blasters end losing streak
Andhra Pradesh Sadhu Parishad president urges government to protect temple lands and appoint Hindu employees in temples.
Tamil Nadu leads in open access electricity consumers, buying power directly from private generators through power exchanges.
BJP counters Siddaramaiah's claims, stating election mandate not a "clean chit," alleging Congress corruption and broken promises.
West Bengal Governor embroiled in controversy over unveiling own statue, sparking criticism from political circles.
Increase in men opting for vasectomy in Coimbatore district due to awareness and higher family planning allowance.
Dozens killed in sectarian clashes in northwestern Pakistan, with ongoing violence prompting government intervention and community negotiations.
Celebrating 20 years of Sanghamitra Rural Development Society's impactful work in rural education and healthcare with community support.
Experience the iconic Kadalekai Parishe in Basavanagudi with more stalls, massive footfall, and a plastic-free environment this year.
Blood Donors Club of Madurai Medical College organized 'Uthiram 24' marathon to promote blood donation with 1,513 participants.
NDA government in A.P. neglecting students and education sector badly hit, alleges Jagan Mohan Reddy
YSR Congress Party (YSRCP) president Y.S. Jagan Mohan Reddy has criticised the National Democratic Alliance (NDA) government in Andhra Pradesh, accusing it of neglecting all sectors and not paying the fee reimbursement benefits to the students.