Keralas total debt has increased by 80% in the last five years . Kerala has received Rs 5,135.2 crore in loans from the government as of Oct.
THIRUVANANTHAPURAM: According to an analysis of the states' financial situation, it has increased by 80% in the last five years.Kerala's total debt, according to statistics published in the assembly, was Rs 1,86,453.86 crore in 2016-17, rising to Rs 3,35,641.15 crore in 2021-22, an increase of 80.01%.In 2016-17, the rate of interest increase was over 10%, with the maximum being 18.48%, relative to the previous financial year.Although the government acknowledged that it is facing a huge financial crisis, it said the causes are beyond its control.In contrast, experts suspected that states' increasing debt can be directly attributed to government funding through groups such as KIIFB.This has a direct connection to using KIIFB services to get loans.The reason for the CAG's recommendation that funds collected through KIIFB be regarded as state debt is because, in the end, all of these are the state exchequer's responsibility.According to economist Mary George, the government's sovereign guarantee, along with the exchequer's motor vehicle tax and petroleum cess, allows KIIFB to obtain loans. This reached its height in 2020-21, at Rs 25,041.51 crore (due to the Centre's lending reduction in Covid-19), before decreasing to Rs 20,292.82 crore in 2021-22.Kerala has received Rs 5,135.2 crore in loans from the government as of Oct. 31.The reason for the current financial crisis is that the government is unable to reduce its expenditures in proportion to the reduction of grants and market borrowings.The data for Kerala's total debt as a percent of GSDP shows it, which now stands at 37.18%, according to budget projections (2022-23). According to the Center, the government guarantees for PSUs should be considered as states' own responsibility because it is a states' guarantee that if the PSU fails, it will repay.If that is included, the debt as a percent of GSDP will rise even higher, highlighting how fragile the financial situation is, George said.Though the government blames the Centre for a partial revenue deficit grant, Kerala is the host of the biggest revenue deficit grant awarded by the 15th finance commission from 2020-21 to 2025-26.The state was given Rs 53,137 crore, the highest amount in comparison to 16 other states that received the money.