The Depth of Fiscal Stress in Kerala: A Structural Analysis

Kerala has achieved high human development outcomes and strong social indicators, but the state has also experienced persistent fiscal stress over the past two decades.Revenue expenditure has increased faster than revenue receipts, while public debt and committed expenditure have continued to rise.Borrowing has increasingly been used to finance routine expenditure rather than productive capital formation.This paper examines the structural nature of Kerala's fiscal stress using recent budget data, audit reports, and secondary literature.The study analyses trends in fiscal deficit, revenue deficit, debt, revenue mobilisation, expenditure composition, and off-budget borrowing.The findings suggest that Kerala's fiscal stress is not temporary or cyclical, but structural in nature.The paper argues that long-term fiscal sustainability will require stronger ownrevenue mobilisation, rationalisation of committed expenditure, improved expenditure quality, and greater transparency in borrowing practices.