Revenue so far in current fiscal fails to cover even committed expenses

THIRUVANANTHAPURAM: The markets and media have said enough about the Kerala’s soaring debt, which may have crossed the whereabouts of Rs4.5 trillion by now.

It would also be interesting to take stock of how much the state will have to shell out in the next couple of years towards the repayment of its debt.

A close analysis of the official documents released by the Comptroller &Auditor General of India (C&AG) on Kerala’s finances reveals that the state will have to cough up in excess of Rs60,000 crore towards its debt in the next three years including the current financial year.

During the current financial year FY25 (2024-25), Kerala will be paying Rs18,554.81 crore. Out of this, the lion’s share of Rs15,700 crore will go towards paying off the market borrowing, which invariably has historically been the largest portion of the debt.

While Rs13.94 crore is owed to General Insurance Corporation (GIC) during FY25, settling of National Small Savings Fund (NSSF) Securities will consume funds worth Rs2,840.87 crore, whereas the Central Government loans to the tune of Rs737.60 core will also have to be settled during the current financial year.

The debt repayments in the forthcoming two fiscals – FY26 and FY27, will be to the effect of Rs20,626 crore and Rs21, 358 crore, respectively.

FY25 borrowings so far

Kerala’s market borrowing during the first quarter of the current financial year (ending June 30) will close at Rs8,000 crore once the borrowing of Rs1,500 core scheduled for Tuesday (June 25) gets concluded.

Committed expenses exceed revenue

Does the financial statement of Kerala for the current financial year until May end, draw a bit disturbing picture of the state’s finances?

As per the documents accessed by businessbenchmark.news, the revenue receipts of the state for the two months – April and May, at Rs12,124.78 crore, are not sufficient to cover even the committed expenses of the state for the same period.

The committed expenses are the amount required to take care of the salary, interest expenses and pension, and this is pegged at Rs15,384.1 crore for the said period – far more than the revenue receipts earnef during the period

The borrowings and liabilities until May count up to Rs13,521.21 crore compared with Rs11,097.33 crore the government borrowed for the same period last fiscal.

The state’s share of Union taxes in the first two months of the current financial year is a meagre Rs829.68 crore, just 4.76 per cent of what has been estimated for the whole financial year at Rs17,426.88 crore.

The same was to the tune of Rs1,368.58 crore during the first two months of the previous financial year – April and May, 2023.

The state’s Finance Minister KN Balagopal has called upon the Union Finance Minister Nirmala Sithraman recently with the request to allow a fresh funding package of Rs24,000 crore to tide over the acute liquidity crisis faced by the state.