Kerala’s total debt has risen to ₹5.07 lakh crore, according to a White Paper released by the state government. The report states that 77 per cent of the state’s revenue is being spent on salaries, pensions and interest payments, leaving limited resources for development activities.
The White Paper also highlights a worsening treasury situation, noting that most of the funds currently available are borrowed money. Treasury balances reportedly declined from ₹6,322 crore on March 31, 2026, to ₹5,263 crore in April and further to ₹2,211 crore by May 16.
According to the report, Kerala’s capital expenditure on development projects is among the lowest in the country, raising concerns over the state’s ability to invest in long-term growth and infrastructure.
The document also levels sharp criticism against the previous government’s handling of the Kerala Infrastructure Investment Fund Board (KIIFB). It states that KIIFB has accumulated loan liabilities of nearly ₹21,000 crore and points out that these borrowings are treated as part of the state’s overall debt burden.
The White Paper further notes that major public sector undertakings, including the Kerala State Road Transport Corporation (KSRTC), Kerala State Electricity Board (KSEB), and Kerala Water Authority, continue to incur significant losses.
Additionally, the report states that both the state’s tax revenues and financial assistance from the central government have fallen short of expectations, increasing fiscal pressure on the state’s finances.
