Kerala facing acute financial crisis, but moving ahead with clear road map, says finance minister

“It is true that the state is facing an unprecedented financial crisis. However, the reasons contributing to the crisis are beyond the control of the state… that is the fact,” Balagopal said.

Compared to the previous financial year, there was a dip of ₹6,716 crore in the revenue deficit grant (released to the state by the Centre) during the ongoing financial year, he informed the House.

However, the minister replied negatively to the question whether it was found that the wrong financial management by the state was the reason for the present financial crisis.

Related: Experts see few options as Kerala heads for a severe economic crisis

Centre blamed for woes

Natural disasters, the Covid-19 pandemic, distorted policies of the Centre, the implementation of the Goods and Services Tax (GST) without much contemplation, delayed distribution of GST compensation and imposition of cuts in the borrowing limit of the state by the union government were among those reasons that triggered the present financial crisis in the southern state, he explained.

Also read: Kerala hiking tax on liquor is ‘corruption’, says Congress

The Left government was trying to overcome the crisis through strict financial discipline by strengthening tax collection, avoiding unwanted expenses and keeping its expenses to the minimum, the minister added.

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