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Ravi @dtytrivedi
, 27 tweets, 7 min read Read on Twitter
Challenges in The Kerala Economy before floods. Every India state has some challenges and Kerala state is no exception. What is more surprising is that it has not been discussed in the Main Stream Media.
Whenever word Kerala comes in one's mind, we think of Tourism and Hospitaliy, God's own Country and the Most literate state among Indian states. But one should also look at the challenges it is facing.
1. Employment
The most surprising thing which I came to know is that despite Being among most literate states its successive Govt. has failed to address the issue of unemployment.
The economic review report has pointed out that job creation has been a matter of serious concern in the state. The incidence of unemployment in Kerala is more than two times the all-India average. timesofindia.indiatimes.com/articleshowpri…
Unemployment Rate: Kerala Vs India. livemint.com/Politics/EcMA8…
2. Economic Growth. livemint.com/Politics/EcMA8…
Kerala has been ranked 14th in economic growth in a study of 16 states undertaken by ratings agency Crisil.

timesofindia.indiatimes.com/articleshow/61…
The research report -- which looked at the performance of the states across three macroeconomic parameters of growth, inflation and fiscal health between FY13 and FY17.
Gujarat, Madhya Pradesh and Haryana were the fastest-growing states between fiscals 2013 and 2017. Bringing up the bottom were Punjab, Uttar Pradesh and Kerala,” the report, States of Growth, says.
How do Kerala rank in GVA of labour-intensive sectors?
Tax revenue and non-tax revenue
Growth rate of state’s own tax revenue has been showing a declining trend for the last five years. In 2010-11, it was 23.24 while in 2016-17 it came down to 8.16 per cent. newindianexpress.com/states/kerala/…
The receipt from the state’s own tax revenue showed a marginal increase of Rs42,176.38 crore in 2016-17 compared to Rs38,995.15 crore in 2015-16.
The review report also said the LDF government had assumed power with a precarious situation of net unpaid negative treasury cash balance of Rs 173.46 crore. timesofindia.indiatimes.com/city/thiruvana…
The new government had to bear the brunt of huge magnitude of deferred liabilities of the previous government, amounting to around Rs 6,000 crore and non-budgeted short-term liabilities of Rs 4,300 crore.
Another major factor that affected the economy of the state was the decreased inflow of foreign remittances. Activities in the state, particularly in the fields of trade, real estate and construction, weakened due to the decline in foreign remittances
3. Inflation

Inflation has also posed hurdles in Kerala’s economic growth: Crisil study. “Inflation was high in Telangana, Odisha, Tamil Nadu, Bihar, Rajasthan, Uttar Pradesh and Kerala,” the study notes.
The average CPI-based inflation rate of 6.8% was higher than the country’s average rate of 6.6%. However, Bihar, Tamil Nadu and Uttar Pradesh fared relatively better in easing the inflationary pressure on their economies, it shows. timesofindia.indiatimes.com/city/kochi/cri…
Kerala has both debt and deficit levels exceeding the benchmark (debt/GDP > 23.7%, and FD/GDP > 3%).
The financial status of Kerala has deteriorated during 2016-17 when compared to the last financial year in terms of key parameters such as revenue, fiscal and primary deficits, Controller and Auditor General of India (CAG) said. moneycontrol.com/news/business/…
The 9.53 per cent growth rate of revenue receipts in 2016-17 was the lowest recorded during the last five years, said the CAG report on the state finances for the year ended March 2017 that was tabled in the assembly by state finance minister T M Thomas Isaac.
The revenue receipts were insufficient to meet its non-plan revenue expenditure, it pointed out. On the state's own tax revenue, the report said, it recorded the lowest growth rate of 8.16 per cent in 2016-17.
With regard to debt management, the report said almost 68 per cent of the loans raised during 2016-17 were used for servicing the debt.
The second report of Kerala Public Expenditure Review Committee (KPERC) has warned that the new targets set by Fiscal Responsibility and Budget Management (FRBM) Review Committee would impose huge burdens on the state, perhaps more than any other state in the country.
If the recommendations are accepted, the report states that the state will have no choice but to drastically cut down expenditure. The FRBM Review Committee, which submitted its report last year, has recommended massive correction in both fiscal deficit and outstanding debt.
It states that the FD should be compressed to 1.70 percent of the gross state domestic product by 2022-23; the budgeted FD for 2018-19 is 3.10 percent. deccanchronicle.com/nation/current…
According to the KPERC report, the state has only two options if the FRBM recommendations are accepted. It should either have to drastically cut down overall expenditure or its revenues (abysmally low now) should become substantially more buoyant.
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