Centre's 'step-motherly' treatment has left the state in a liquidity crunch, says Kerala

Blaming the Centre for “step-motherly” treatment that has resulted in a liquidity crunch for the state, Finance Minister KN Balagopal said Kerala is going through a “growth phase” and is poised for very good development in infrastructure, industrial as well as services sectors that will create more job opportunities.

Amid concerns over the state's financial health, he asserted revenue generation has made a “giant leap” to Rs 71,000 crore in the last fiscal, but the central government's “step-motherly” treatment has resulted in a liquidity crunch.

Balagopal cited reports by various agencies, including the recent Fitch Ratings, to affirm that the “state is now going through a very good economic growth phase”. In recent months, the Left-ruled Kerala has been raising its voice against the BJP-led government’s moves on the fiscal front, including alleged delay in releasing GST funds and curbs on the state in terms of raising money.

Referring to the steps taken by the finance department for better revenue generation, the minister said through efficient tax administration, the Pinarayi Vijayan government, which came to power in 2021, has made a giant leap in state-owned tax revenue (SOTR) and claimed it was an indication of Kerala's economic growth. Balagopal criticised the central government, alleging it was denying Kerala its legitimate shares of various resources, causing a serious liquidity crunch.

The Fitch Ratings recently revised the outlook on the Kerala Infrastructure Investment Fund Board to stable from negative.

Various agencies including Fitch Ratings “assessed the financial position of the state, and they calculated how revenue is being generated, how investment capital generation is happening, and how debts are coming down. There is a very notable improvement in all these areas post-Covid-19”, the minister stated.

(With agency inputs)