Thiruvananthapuram: According to the latest report from the Comptroller and Auditor General (CAG), Kerala's outstanding public debt has reached Rs 2.52 lakh crore, with Rs 94,271.83 crore added between 2018 and 2023. The CAG cautioned that this trend of increasing debt could jeopardize the state’s future debt sustainability.

In FY 2022-23, the Kerala Infrastructure Investment Fund Board (KIIFB) borrowed Rs 5,109.24 crore, while the Kerala Social Security Pension Limited borrowed Rs 2,949.67 crore. The report highlighted that this total of Rs 8,058.91 crore was sourced outside the state budget.

While tabling the report in the Kerala Assembly, Finance Minister K N Balagopal also added a dissenting note, asserting that CAG's observation on the matter had already been dismissed by the assembly in 2019. He also defended the government's welfare pension schemes, which he argued have helped keep poverty in Kerala below 1 per cent.

The CAG noted that in 2023, 97.88 per cent of the state's borrowing was allocated to repaying earlier debts. Over the past five years, between 76 per cent and 98 per cent of borrowed funds were directed towards debt repayment and interest, with a mere 2.12 per cent invested for other purposes. Furthermore, Rs 1.36 lakh crore (54.08 per cent) of the total debt is due for repayment in the next seven years.

To address the growing debt, the CAG recommended that the government avoid taking additional borrowing and instead mobilize resources for socio-economic development projects.

In terms of fiscal performance, the state saw a 13.79 per cent increase in revenue, totalling Rs 1.32 lakh crore for FY 2022-23. The tax revenue collection rose by 23.36 per cent to Rs 71,968.16 crore, while non-tax revenue jumped by 44.50 per cent to Rs 15,117.96 crore. Income from lotteries surged from Rs 9,135.40 crore to Rs 13,553.39 crore. However, the Centre's assistance decreased by 8.79 per cent, falling from Rs 47,837.21 crore to Rs 45,638.54 crore.

Overall, the state's total expenditure decreased by 2.75 per cent to Rs 1.58 lakh crore, with salaries, pensions, and interest expenses dropping by Rs 5,325 crore to Rs 90,656.05 crore. The revenue deficit decreased by 68.77 per cent from Rs 29,539.27 crore to Rs 9,226.28 crore, and the fiscal deficit was reduced by 44.50 per cent, from Rs 46,045.78 crore to Rs 25,554.54 crore.