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Kerala missed its fiscal deficit target in 2021-22 financial year: CAG report

The fiscal deficit to state GDP ratio, which was to be anchored at 4 per cent as per the Kerala Fiscal Responsibility Amendment Act, 2022, came in at 5.10 per cent during 2021-22.

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Kerala did not achieve its fiscal deficit target fixed in its Medium Term Fiscal Plan or the Kerala Fiscal Responsibility Act during 2021-22, an audit report of the Comptroller and Auditor General of India (C&AG) revealed on Thursday. The fiscal deficit to state GDP ratio, which was to be anchored at 4 per cent as per the Kerala Fiscal Responsibility Amendment Act, 2022, came in at 5.10 per cent during 2021-22.

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings that may be needed by the government. The target for revenue deficit was zero. However, it increased by 14.36 per cent in 2021-22 as compared to 2020-21 and stood at 29,539.27 crore, the audit report put out by principal accountant general (audit) said.

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The overall debt as a percentage of GSDP increased from 37.85 per cent in 2020-2021 to 38.01 per cent in2021-22. Moving on to revenue resources, the revenue receipts of the State increased from 83,020.14 crore in 2017-18 to 116,640.24 crore in 2021-22, recording a growth of 40.50 per cent during the last five years.

The State’s own tax revenue, increased from 46,459.61 crore in 2017-18 to 58,340.52 crore in 2021-22. However, as a percentage of revenue receipts, State’s own tax revenue decreased from 55.96 per cent in 2017-18 to 50.02 per cent 2021-22, indicating poor collection of tax revenue during the pandemic period.

Revenue Expenditure of the State increased from 99,948.35 crore in 2017-18 to 1,46,179.51 crore in 2021-22 recording a growth of 46.26 per cent during the five-year period. Revenue expenditure as a percentage of total expenditure ranged between 88.88 and 91.88 per cent during the period showing predominance of revenue expenditure in total expenditure.

Interest payments consumed 19.98 per cent of revenue receipts during 2021-22 and is a matter of concern for the State Government, the audit report noted.

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