Kerala's financial situation not improving: Debt ballooned to Rs 4.48 lakh crore

THIRUVANANTHAPURAM: The state's finances are in dire straits, the Comptroller and Auditor General of India (CAG) said in its report submitted to the Assembly on Thursday. The debt has ballooned to Rs 4.48 lakh crore.

The state failed to effectively develop and implement a financial management system and ensure financial discipline and efficient use of available resources.

In the absence of a Service Level Agreement (SLA), the government was not able to provide a solid foundation for the implementation of projects. The review meetings chaired by the Additional Chief Secretary (Finance), in charge of the implementation of projects, were ineffective.

The CAG also confirmed the state finance minister's claim that the share of central financial assistance in revenue receipts has decreased from 12.45 per cent in 2019-20 to 9.69 per cent in 2023-24, causing hardship to the state.

This is the audit report for the financial year ended March 31 last year. Although the gross domestic product has increased, the government is not receiving a proportionate amount of revenue. 89 to 92 per cent of the total expenditure is used for revenue expenditure, including salaries and pensions. The CAG report also reiterated that although KIIFB's debt is off-budget, the repayment will be from the treasury.

• The CAG said that the e-way bill system implemented as part of GST was a failure.

• The exchequer lost crores through tax evasion.

• Most of the inward supplies worth more than Rs 50,000 did not have e-way bills.

• The analytical reports generated by the NIC were not used by the concerned officials to identify tax evasion.

• There is no system to record summary and final inspection reports online.

• Lack of monitoring by higher authorities is a setback.

• Reports received online are not recorded promptly, or the tax is not checked accordingly

• Information about cases found during the inspection of vehicles was not forwarded to the state/central authorities for further action. Due to this, IGST recorded revenue loss.