Thiruvananthapuram: Kerala Finance Minister K.N. Balagopal has raised red flags over the state’s fiscal health following the rollout of the new GST 2.0 regime, warning that the move could significantly dent state revenues.
While the tax overhaul — which trims GST to just two slabs, 5% and 18%, with a 40% sin tax on luxury and demerit goods — has been hailed for slashing prices of essentials, Balagopal cautioned that states like Kerala, heavily reliant on GST income, may face serious revenue shortfalls.
“Consumers will surely benefit from lower prices, but states that depend on GST collections will feel the pressure. Kerala must prepare to address these fiscal challenges,” FM said.
Balagopal stressed the need for compensation support from the Centre, arguing that without it, welfare programs and developmental projects could take a hit.
