According to a report from the Comptroller and Auditor General of India (CAG), Kerala’s revenue collection in 2021-22 saw a 10 percent decrease from its 2017-18 levels, despite an increase in receipts from the Centre. The state’s revenue arrears, awaiting collection from various departments, reached a substantial Rs 28,258 crore by March 2022, accounting for approximately 25 percent of the state’s total income. The report, presented in the assembly, disclosed that the state government’s revenue collection dropped to 59 percent in 2021-22 from 69 percent in 2017-18, while Centre’s receipts increased from 31 percent to 41 percent during the same period.
Furthermore, the report revealed that although Kerala’s state government raised more revenue in 2021-22 compared to the previous year, the percentage of revenue contributed to the total receipts had decreased compared to the 2017-18, 2018-19, and 2019-20 fiscal years.
The CAG report stated, “The revenue receipts of the state increased by Rs 19,023.41 crore during 2021-22 compared to 2020-21. This was mainly due to an increase in own tax revenue by Rs 10,679.68 crore followed by the state’s share of union taxes and duties by Rs 6,259.69 crore.” The report also noted an increase in non-tax revenue, primarily from state lotteries, and a boost in Goods and Services Tax (GST) collections due to higher sales turnover of goods and services.
However, there were areas of concern. State Excise revenue decreased by Rs 489.17 crore, and outstanding arrears totaling Rs 28,258.39 crore were identified, comprising 24.23 percent of the state’s total revenue. The report emphasized the need for urgent government intervention to clear these outstanding arrears, highlighting that delayed reporting and pursuit by the departments were major reasons for the high arrear amount.
Additionally, the report pointed out a significant drop in the revenue collection growth rate under Land Revenue, from 48.41 percent in 2020-21 to (-) 4.56 percent in 2021-22.
Notably, the report detailed pending arrears to be recovered in various sectors, including GST (Rs 13,410 crore), Interest (Rs 5,979.91 crore), Electricity (Rs 3,118.50 crore), Motor Vehicles (Rs 2,868.47 crore), Land Tax (Rs 635.19 crore), and Land Registration (Rs 590.86 crore). These figures underscore the need for prompt action to address Kerala’s fiscal challenges.
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