Thiruvananthapuram | Kerala has demonstrated remarkable success in managing its finances during the last fiscal year, despite the adverse global situation and the central government's unfavourable approach towards the state, Finance Minister K N Balagopal has said.
He said despite numerous obstacles, the financial performance of the Kerala government during the 2022–23 fiscal year was "impressive." "The state managed to fund critical development and welfare projects, demonstrating the efficiency of its revenue collection systems. Amidst global economic challenges, Kerala's resilience serves as a beacon of hope for overcoming future hurdles," the minister added.
Balagopal said this in an article titled "Rising to the Challenges" published in the latest issue of "Kerala Calling", an official magazine of the state government.
He noted that in March 2023, the Kerala government spent Rs 22,000 crore from the Treasury to fund various governmental activities, allowing for unhindered developmental and welfare projects.
The minister said that through diligent efforts to increase both its tax and non-tax revenue, Kerala has achieved a remarkable feat.
During the last fiscal, the state was able to register an impressive increase of Rs 12,848 crore in its own tax revenue, he said.
"Moreover, the state's GST receipts saw a 25 per cent increase compared to the previous year. In fact, the state's own tax earnings have witnessed a staggering increase of more than Rs 23,000 crore over the past two years," said Balagopal, claiming that the people of Kerala supported these efforts.
He also said the state is currently in the process of reorganising its GST department to further enhance its efficiency.
The minister alleged the central government's measures resulted in a revenue shortfall of approximately Rs 40,000 crore for the state during the last financial year.
"The share of Kerala from the divisible pool of the Central Government, which was 3.875 per cent during the period of the 10th Finance Commission, was cut down to 2.5 per cent at the time of the 14th Finance Commission and further to 1.925 per cent by the 15th Finance Commission.
"As per the report of the 15th Finance Commission, the Centre is garnering 62.7 per cent of total income, leaving just 37.3 per cent to the states. At the same time, the states have to shoulder the burden of 62.4 per cent of expenditure," Balagopal lamented.
He said out of the total revenue income of Kerala in 2022-23, 62.20 per cent was the state's own income.
"At the all-India level, the average own income of the states for the year 2022-23 is 54.74 per cent. Share of own income of Bihar is 24.16 per cent, whereas that of Assam, Rajasthan, Odisha and West Bengal was 29.16 per cent, 56.03 per cent, 57.45 per cent and 43.43 per cent respectively.
Only the industrially advanced states like Haryana and Maharashtra are ahead of Kerala in mobilising their own income. This demonstrates the efficiency of the systems that are in place in the state for collecting tax and non-tax revenues", Balagopal said.
He said amidst the ongoing COVID-19 pandemic and the Ukraine crisis, many economists were concerned about the possibility of a global and national recession.
However, in stark contrast, Kerala has demonstrated remarkable success in managing its finances during the last fiscal.
Referring to the International Monetary Fund's report, which says the global economic growth for the financial year 2022-23 is forecast to be only 2.9 per cent, Balagopal said the significant disruption in the global supply chain has led to a downturn in world trade.
Several neighbouring countries, such as Sri Lanka and Pakistan, are grappling with severe economic crises, with inflation rates exceeding 40 per cent.
"In spite of all the difficulties, the Government of Kerala is fully confident of overcoming these hurdles and ensuring the welfare of the people," he said.