Kerala Chief Minister Pinarayi Vijayan has said the state is showing signs of financial recovery despite being battered by the Covid-19 pandemic and what he described as continued policy pressure from the central government.
Speaking at a press meet in Thiruvananthapuram on May 21, marking the fourth anniversary of the current government, Vijayan pointed to a drop in the state's debt-to-GSDP (Gross State Domestic Product) ratio — a key measure of how much a state owes in relation to its economic output. He said the ratio has come down from 38% in 2021-22 to 34% in recent years.
For those unfamiliar, the debt-to-GSDP ratio is similar to a person's debt-to-income ratio — it shows whether a state is borrowing more than it can afford based on its economic strength. A lower ratio suggests better financial health. But, of course, it’s not the only factor that matters.
The CM claimed that Kerala's improved numbers are a result of tighter control over spending and efforts to boost the state’s own revenue.
In a sharp jab at the opposition, Vijayan accused certain groups of spreading misinformation. “There are those who are trying to paint a picture of financial doom. But the data speaks otherwise,” he said, without naming anyone specifically.
The comment seems aimed at critics who have accused the state of relying too heavily on loans and pushing Kerala into a debt trap. Whether this trend continues or reverses in the coming years remains to be seen.
Kerala’s tax revenue has grown by 71.66% between 2020-21 and 2024-25, according to figures shared at the press conference. The government says its own revenue now makes up nearly 73% of its total income — a jump from about 69% in 2015-16.
That’s a notable shift, and it suggests the state has become more self-reliant in terms of income, although external factors such as GST share delays and central grants still play a role. See
The state is also moving towards "faceless adjudication" in its GST department. In simple terms, it means taxpayers won’t need to appear before tax officers for every small issue. Returns will be processed digitally, reducing face-to-face interaction — a move that’s being pitched as a way to cut corruption and delays.
The GST department was restructured last year, and Kerala now ranks first in the country for GST intelligence and enforcement, according to the GST Council's internal metrics. It’s also reportedly the fastest state when it comes to issuing new GST registrations.
Kerala is actively pushing for wider adoption of e-invoicing in the GST Council. This means businesses would be required to digitally report all invoices, especially for interstate transactions — helping curb tax evasion and improving transparency.
Whether these reforms will make a real dent in improving Kerala’s overall fiscal condition is something only time will tell. But for now, the state leadership seems confident in its financial housekeeping.
