Kerala election results: fiscal mess may get worse regardless of which party forms govt
Subscribe to enjoy similar stories.Chennai: To say the Kerala government’s finances are in a mess is an understatement. The state has a litany of woes which successive governments have failed to take head on. Its ability to raise revenue is impaired.
Its borrowings are high, and so is its interest burden. It is struggling to create jobs for its educated youth. They are leaving for better pastures.
This is adding pressure to the already ageing population, which is fuelling higher healthcare and pension costs.The pattern of remittances, which account for 20% of the gross state domestic product (GSDP), is changing for the worse. With successive governments failing to take on this litany of woes, its finances have only worsened. “The state’s financial position is pitiable,” K.P.
Kannan, a development economist and former director at the Centre for Development Studies, recently told Mint.Rich people, poor government: Kerala is a perfect example of a state with rich people and poor government. People of the state consume a lot. “For example, households in Kerala with at least one car is 25% as per recent household consumption surveys.
Compare this with the national average of just 8%. The story is the same when it comes to consumer durables,” Kannan pointed out. But the higher consumption does not translate into higher taxes.Between 2017-18 and 2023-24, the state’s own tax revenues grew by an average 6.5% per year, even as its GSDP grew by 8.5% annually.
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