THIRUVANANTHAPURAM: Kerala Chief Minister V. D. Satheesan on Thursday presented a white paper in the Assembly outlining the state’s financial situation, revealing a debt burden of Rs 5.07 lakh crore, rising liabilities, mounting losses in public sector undertakings, and one of the lowest levels of capital expenditure among Indian states.
Soon after, the ruling United Democratic Front (UDF) and the opposition Left Democratic Front (LDF) traded barbs, exchanging claims and counterclaims about the state’s finances. The white paper painted a bleak picture, with Kerala facing an outstanding liability of Rs 5.07 lakh crore. It also noted that committed expenditure makes up 77 per cent of the state’s total revenue receipts (TRR), while interest payments alone account for 20.09 per cent of TRR.
In Kerala, salaries and pensions of government employees are classified as committed expenditures. Together with interest payments, they consume about 77% of the state’s revenue receipts, leaving very little room for development spending.
The government noted that Kerala’s capital expenditure is just 1.3 per cent of its Gross State Domestic Product (GSDP), among the lowest in the country. The accumulated losses of PSUs rose from ₹31,571 crore in 2021-22 to ₹78,851 crore in 2024-25.
The White Paper also raised concerns about the financial position of the Kerala Infrastructure Investment Fund Board (KIIFB), which faces a loan liability of ₹21,000 crore while projects worth ₹35,000 crore remain unfunded.
KIIFB is a statutory body established in 1999, to mobilise funds for large infrastructure projects in the state.
Additionally, the government revealed it inherited unpaid liabilities of ₹48,733 crore from the previous administration, including pending Dearness Allowance (DA) and Dearness Relief (DR) arrears.
Presenting the White Paper in the Assembly, the Chief Minister said, “It is a status report on the financial health of the state, brought out to inform the public about Kerala’s economic condition.”
Satheesan rejected allegations that the White Paper was politically motivated, stating that it had been prepared under the supervision and leadership of the Finance Department and was based on information already available in the public domain, including budget documents. The White Paper, he said, was approved by the Cabinet and dismissed claims that it was a political document.
The Chief Minister added that the government would seek expert advice whenever necessary, as it does not believe it knows everything, and noted that the UDF government had done the same in the past.
Former Finance Minister K. N. Balagopal criticised the government for not preparing the document in the traditional manner used by the Finance Department earlier. He expressed concern that confidential internal government accounts may have been shared with private individuals during the process, which could amount to violations of the Constitution, official secrecy provisions, and established government procedures.
He said all the white papers in the past were prepared by the finance department. It is a political document, and if this one is allowed to be tabled, it would set a wrong precedent for the future.
Opposition Leader Pinarayi Vijayan said it was surprising that the white paper was not drafted directly by the finance department. He added that the opposition was not against the government seeking expert advice, but noted that white papers have traditionally been prepared by the finance department itself.
Chief Minister Satheesan, reacting to the criticism, questioned how the opposition could conclude that the document violated rules or was politically motivated without first examining its contents. After hearing arguments from both the ruling and opposition members, Speaker Thiruvanchoor Radhakrishnan ruled in favour of allowing the document to be tabled. He stated that the chair had not found any violation of rules in tabling the white paper, and it has now become part of the Assembly records.
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