Keralas Liabilities Estimated at ₹5.07 Lakh Crore, Chief Minister Warns of Fiscal Structure Strain

In the 2025-26 fiscal year, salaries, pensions, and interest payments accounted for 77.6% of the states revenue receipts, highlighting a significant strain on financial resources. In response to this fiscal challenge, a comprehensive overhaul of the Kerala Infrastructure Investment Fund Board (KIIFB) has been suggested to improve efficiency and effectiveness in project funding and execution.

Additionally, urgent reforms have been recommended for key public service sectors, including the Kerala State Electricity Board (KSEB), Kerala State Road Transport Corporation (KSRTC), and Kerala Water Authority (KWA), to enhance operational efficiency and service delivery.

Experts have also noted that the state’s capital expenditure, which stands at 1.3% of the Gross State Domestic Product (GSDP), is one of the lowest among Indian states. This low investment in capital projects could hinder future economic growth and infrastructure development. Policymakers are urged to consider strategies that would increase capital spending to bolster economic development and public welfare in Kerala.