Kerala's total debt has reached Rs 5.07 lakh crore, as revealed in a white paper titled 'Kerala’s Fiscal Health: A Status Report' tabled in the state assembly on Thursday by Chief Minister V D Satheesan. The report, brought out by the newly sworn-in Congress-led United Democratic Front (UDF) government, outlines the state's deteriorating financial condition and suggests measures to restore fiscal stability.
Key Recommendations
The white paper recommends a series of corrective measures, including raising the retirement age for state government employees. This step is aimed at reducing the pension burden and retaining experienced personnel. Additionally, the report calls for revamping the Kerala Infrastructure Investment Fund Board (KIIFB), the state's nodal agency for infrastructure financing, to improve transparency and efficiency.
Debt Burden Details
According to the report, Kerala's debt has increased significantly over the years, with the state's fiscal deficit widening. The white paper highlights that the debt-to-GDP ratio has crossed the sustainable limit, necessitating urgent fiscal consolidation. The UDF government has blamed the previous Left Democratic Front (LDF) administration for the financial mess, citing excessive borrowing and poor financial management.
Other Suggestions
Apart from raising the retirement age and revamping KIIFB, the white paper suggests enhancing revenue generation through better tax compliance, reducing wasteful expenditure, and prioritizing capital spending. It also recommends a review of subsidies and welfare schemes to ensure they are targeted effectively. The government plans to implement these measures gradually to bring the state's finances back on track.
