Lok Sabha Question No. 162 (UNSTARRED), answered on 2025-07-21
Subject: Financial Crisis in Kerala
Ministry: FINANCE
Asked by: Shri N K Premachandran

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF EXPENDITURE

## LOK SABHA

## UNSTARRED QUESTION NO. 162

TO BE ANSWERED ON MONDAY, 21 st  JULY, 2025 30 ASHADHA, 1947 (SAKA)

## FINANCIAL CRISIS IN KERALA

## 162. Shri N K Premachandran

Will the Minister of Finance be pleased to state:

- (a) whether the Government analysed the reasons for financial crisis in Kerala;
- (b) if so, the details thereof and if not, the reasons therefor;
- (c) whether the Government proposes to resolve the grave financial crisis in Kerala such as debt burdens, fiscal deficit, restriction of borrowing capacity, etc.;
- (d) if so, the details thereof and the action taken thereon; and
- (e) the year-wise details of borrowings and debt  of Kerala during  the last ten  years and the current year?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a) to (b) Fiscal performance of all States including the State of Kerala is monitored by the respective State Legislatures. The State Government of Kerala has enacted the Kerala Fiscal Responsibility Act, 2003.It makes the State Government responsible for ensuring prudence in fiscal  management  and  fiscal  stability.  This  is  to  be  done  by  progressive  elimination  of revenue  deficit  and  sustainable  debt  management  consistent  with  fiscal  stability,  greater transparency in fiscal operations of the Government and conduct of fiscal policy in a medium term fiscal frame work.

(c) to (d) Union Government of India applies a common yardstick and generally follows the fiscal limits  mandated by the accepted recommendations of the Finance Commission while exercising  the  powers  to  approve  borrowings  by  the  State  under  Article  293  (3)  of  the Constitution of India. Further, the Government of India is also providing substantial financial resources to State Governments including the Government of Kerala in the form of Finance Commission Recommended Grants, Central Sector Schemes, Centrally Sponsored Schemes, and Special  Assistance to States for Capital  Investment. The assistance provided to Kerala under these heads from 2021-22 to 2025-26 (till 10.07.2025) is given in Annexure-I.

(e) As per RBI report titled 'State Finances: A Study of Budgets'and information provided by RBI, year-wise details of Market Borrowings and Total Outstanding Liabilities of State Government of Kerala during the last 10 years and current year are given in Annexure-II.

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## Annexure-I referred to in the answer of part (c) to (d) of Lok Sabha Unstarred question no. 162 answered on 21.07.2025

The assistance provided to Kerala in the form of Finance Commission Recommended Grants, Central Sector Schemes, Centrally Sponsored Schemes, and Special Assistance to States for Capital Investment from 2021-22 to 2025-26 (till 10.07.2025)

(in Rs crore)

| Heads                                               | 2021-22   | 2022-23   | 2023-24   | 2024-25   | 2025-26 (10 th July, 2025)   |
|-----------------------------------------------------|-----------|-----------|-----------|-----------|------------------------------|
| Finance Commission Recommended Grants               | 22,171    | 15,382    | 7,246     | 2,532     | 558                          |
| Central Sector Schemes                              | 6,896     | 7,262     | 6,040     | 6,106     | 582                          |
| Centrally Sponsored Schemes                         | 8,300     | 10,249    | 8,061     | 7,795     | 2,218                        |
| Special Assistance to States for Capital Investment | 238       | 1,903     | -         | 2,716     | 657                          |
| Total                                               | 37,605    | 34,796    | 21,347    | 19,149    | 4,015                        |

## Annexure-II referred to in the answer of part (e) of Lok Sabha Unstarred question no. 162 answered on 21.07.2025

## Year-wise details of Market Borrowings and Total Outstanding Liabilities of State Government of Kerala during the last 10 years and current year

(in Rs crore)

| Year    | Market Borrowings            | Total Outstanding Liabilities          |
|---------|------------------------------|----------------------------------------|
| 2015-16 | 15,000                       | 1,62,272                               |
| 2016-17 | 17,300                       | 1,91,623                               |
| 2017-18 | 20,500                       | 2,16,499                               |
| 2018-19 | 19,500                       | 2,43,746                               |
| 2019-20 | 18,073                       | 2,67,585                               |
| 2020-21 | 28,566                       | 3,10,856                               |
| 2021-22 | 27,000                       | 3,60,037                               |
| 2022-23 | 30,839                       | 3,87,798                               |
| 2023-24 | 42,438                       | 4,26,020 (RE)                          |
| 2024-25 | 53,666                       | 4,71,091(BE)                           |
| 2025-26 | 14,000 (till 9 th July 2025) | 4,81,997 (Projected as on 31.03.2026)* |