Flawed economic policies of the LDF government have dragged the State to the brink of a severe financial crisis, K.C. Joseph, MLA, has alleged.
Urgent measures were needed to put the brakes on the evolving scenario, he said in an article on the State's financial situation.
Public debt has increased by ₹75,303.95 crore during the past three years of LDF governance. In 2014-15, it had stood at ₹1,35,458.41 crore and in 2017-18, ₹2,10,762.36 crore. The per capita debt liability, which stood at ₹34,841 in 2014-15, has risen to ₹67,566.49, he said.
“Salary, pension and interest on public debt alone amounts to 89% of the revenue income of the State. There is a steep rise in revenue deficit. The outstanding debt due to be paid in the year 2025 will be ₹71,698 crore,” Mr. Joseph said.
Only 26% of the loans taken from international financial institutions and money raised through masala bond, Pravasi (NRI) chits and bonds were spent for development schemes. The rest was used to meet salary, pension and interest payment commitments, Mr. Joseph alleged.
Even money received through donations for post-flood Rebuild Kerala initiative had drained out in this manner, he said.
“The tragic part is that the treasury is almost empty after paying the pension, salary and payment of interest,” he said. And despite an urgent need to tighten the belt, government spending on luxuries, celebrations and advertisements is crossing all limits,” he said.
The Kerala Infrastructure Investment Fund Board (KIIFB) initiative too would lead Kerala into a debt trap, Mr. Joseph said. Even excluding KIIFB commitments, Kerala would have to repay the public debt of ₹71,698 crore in 2025, he said.
