This Report of the Finances of the Government of Kerala is being brought out with a view to assess objectively, the financial performance of the State during 2015-16 and to provide the State Government and the State Legislature with timely inputs based on audit analysis of financial data. For the last few years, State’s revenue resources were insufficient to meet its revenue expenditure and hence the State was in revenue deficit during the period. However, during 2015-16 revenue deficit (Rs.9,657 crore) reduced compared to 2014-15 (Rs.13,796 crore) due to receipt of Post Devolution Revenue Deficit Grant (Rs.4,640 crore) from Government of India, based on the recommendations of Fourteenth Finance Commission. The fiscal deficit (Rs.17,818 crore) also decreased compared to last year (Rs.18,642 crore) and it was 3 per cent of the GSDP against 3.6 per cent in 2014-15.
Revenue receipts (Rs.69,033 crore) of the State increased by Rs.11,082 crore, compared to the previous year and more than 50 per cent (Rs.6,178 crore) of this increase was contributed by share of union taxes and grants-in-aid from Government of India. Though, State’s own tax revenue increased by Rs.3,763 crore, its growth rate (11 per cent) was much less than the growth rate of revenue receipts (19 per cent) and also less than the growth rate of GSDP (13 per cent). During 2015-16, plan revenue expenditure recorded a better growth rate of 17.5 per cent and overall revenue expenditure growth was 9.7 per cent, which was the lowest growth rate shown during the last five years. Though interest payments and pensions recorded an increase of 14 per cent and 16 per cent respectively during 2015-16, growth rate of payment of salary and wages was less than 10 per cent only.
State’s share of expenditure on education and health in total expenditure was higher than General Category States, but in respect of development expenditure, social sector expenditure and capital expenditure, State’s performance was poor comparing to General Category States. Though growth rate of debt liability showed a declining trend during the last four years, debt-GSDP ratio showed a steady increasing trend during the last five years indicating increased growth rate of debt compared to GSDP. Against the total budget allocation of Rs.1,18,890.79 crore, total expenditure was Rs.94,377.17 crore, which resulted in under–utilisation of 21 per cent (Rs.24,513.62 crore) of the budget allocation during 2015-16. This was one per cent more than the under-utilisation during 2014-15.