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Kerala finance minister K N Balagopal | Photo: Mathrubhumi
Thiruvananthapuram: Even as the state is looming under a financial crisis, the financial department expects better economic growth in the next three years. Revenue deficit, fiscal deficit and debt-to-income gap are expected to narrow.
‘Medium Term Fiscal Policy and Strategy Statement with Medium Term Fiscal Plan for Kerala’, submitted along with the budget has financial forecasts for the years 2023-24, 2024-25 and 2025-26.
According to that, an 11.23 percent growth in Gross State Domestic Product (GSDP) is expected in the financial year 2023-24. Similarly, for the next two years, it is expected to grow at 12.5 percent. The expectations are as follows:
1. Debt and liabilities will increase from the current Rs 3.7 lakh crore to Rs 4.96 lakh crore in 2025-26. However, as growth is expected, the debt to GSDP ratio will likely come down to 34.6 percent from the current 36.38 percent.
2. The expense incurred for interest will rise to Rs 31,853 core from Rs 24,960 in the ongoing year. However, the average interest rate will come down from 7.07 percent to 6.72 percent.
3. Salary expenditure in 2025-26 is expected to be at Rs 46,283 crore. While Pension expenditure is expected to be Rs 32,633. The amount to be incurred on salary and pension will total Rs 78,916 crore. The previous year, the amount was Rs 71,391 crore.
4. The state’s tax revenue will decrease by 5.28 percent in the ongoing year. However, it is expected to increase by 15.46 percent next year. In the next two years, the tax revenue is expected to increase by 14 percent.
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