New Delhi: Attorney General R Venkataramani has presented a comprehensive note to the Supreme Court outlining the dangerous financial state of Kerala. Drawing attention to adverse observations from successive Finance Commissions and the Comptroller and Auditor General of India (CAG), the note reveals Kerala’s status as one of the most financially unhealthy states in the country.
The Centre’s affidavit, submitted in response to Kerala’s suit, sheds light on Kerala’s financial vulnerabilities, citing concerns over its escalating debt levels and poor public financial management. The Reserve Bank of India (RBI) has also included Kerala among the five highly stressed states necessitating urgent corrective measures.
Key indicators reveal Kerala’s poor financial health, with outstanding liabilities as a percentage of Gross State Domestic Product (GSDP) witnessing a concerning rise from 31 percent in 2018–19 to 39 percent in 2021–22, surpassing the national average. Additionally, interest payments as a percentage of revenue receipts have surged to 19.98 percent in 2021–22, far exceeding the 14th Finance Commission’s recommended threshold of 10 percent.
The note filed by the Centre was in response to the Kerala government’s petition challenging the alleged interference of the Centre in the state’s finances.
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