Kerala's internal revenue generation tipped to cross ₹1 lakh crore in 2025-26, says Finance Minister
Kerala's own revenue is projected to cross the ₹ 1 lakh crore-mark in 2025-26, signalling that State finances will continue in recovery mode despite severe challenges on the fiscal front, Finance Minister K.N. Balagopal has said.
Mr. Balagopal said the Finance department expected internal revenue generation, from both own tax and non-tax sources, to touch ₹1.05 lakh crore in the current fiscal. The estimated growth, he said, was the outcome of improved efficiency in tax collection enabled by a comprehensive overhaul of the Taxes department in the Goods and Services Tax (GST) regime.
Under the present Communist Party of India (Marxist)-led Left Democratic Front government, the State's own tax revenues (SOTR) had steadily improved from ₹47,661 crore in 2020-21 to ₹76,656 crore in 2024-25. Non-tax revenues grew from ₹7,327 crore to ₹16,568 crore during the same period.
The government, Mr. Balagopal said, had succeeded in pulling up the State from a Central policies-induced 'nosedive' to a position where it was equipped for 'take-off' to the next phase. 'We have achieved this in a situation where Kerala was deprived of about ₹50,000 crore annually due to the shrinkage of borrowing space and discontinuation of the revenue deficit grant and GST compensation,' he said.
Mr. Balagopal said there was continued scope for finetuning tax collection. On the Integrated GST (IGST) front, systemic issues in the mechanism of its settlement with all States had deprived Kerala of ₹956.16 crore. Kerala had taken up the matter with the Centre, Mr. Balagopal said.
Mr. Balagopal said the State expected to allocate ₹600 crore this year towards the Guarantee Redemption Fund (GDR). The GDR was meant to cover government guarantees offered for loans availed by public sector entities and cooperatives. According to Kerala, the Centre had reduced the State's borrowing limit by a further ₹3,300 this year citing the GDR as a requirement.
Mr. Balagopal also swept aside reports that the State's debt would touch ₹6 lakh crore this year-end. It would increase to about ₹4.7 lakh crore, but the State had been able to reverse the previous trend where debt doubled every five years.
As part of the drive against tax evasion, the State GST department was planning action against traders/businesses who evaded taxation by deploying street vendors to sell their products, the Minister said.
'Such practices take unfair advantage of the benefits enjoyed by genuine street vendors,' he said. In May, the SGST department had busted an organised racket engaged in the manufacture and sale of spurious diesel, he said.
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