Kerala asked to repay Rs. 50,000 crore within five years, CAG report

Thiruvananthapuram: The Comptroller and Auditor General's report says that the state should repay the debt of Rs.50684.71 crore rupees within the next five years. A debt of Rs. 81056.92 crore (51.22 per cent) has to be repaid within seven years (March 2026). The CAG report on the financial situation states that additional resources need to be mobilized and other steps should be taken to repay the debt.

The report made grave remarks that the state's habit of borrowing money year after year to meet the deficit is not a good sign for an economy in the long run. According to the report, the lion's share of the amount was used to pay off debts and pay interests. In the year 2018-19, only Rs. 3168 crore was used for developmental purposes. Instead of controlling the fiscal deficit and revenue deficit, it is growing exponentially.

The report further reveals that the state has failed to properly implement the Financial Responsibility Act or the mid-term financial management plans. The fiscal deficit has widened over the past five years. The revenue deficit has increased from Rs 13,796 crore in 2014-15 to Rs 17,462 crore in 2018-19. And the fiscal deficit has increased to Rs 26,958 crore from Rs 18,642 crore.

The government has also failed to maintain the fiscal deficit GSDP ratio at 3 per cent as recommended by the 14th Finance Commission.

The main source of own tax revenue has declined from 61 per cent in 2014-15 to 55 per cent in 2018-19. There was also a huge increase in revenue expenditure. It increased from Rs Rs. 71,746 crore in 2014-15 to Rs. 1,10,316 crore in 2018-19. In revenue expenditure alone, the share of inevitable expenses such as salaries, pensions and interest rose to 63 per cent.

It has also caused concerns that the 18 percent of revenue is spent on interest. The capital expenditure has shown a decline in 2017-18 and 2018-19 with Rs.1377 crore in 2017-18 and Rs. 1318 crore in 2018-19. Most of it was spent on education and health.