Journal article Open Access

A study on the Impact of Public Debt on the Finances of Kerala

Dr. V Johnson

The Public Debt of Kerala has been on the rise ever since her attainment of statehood in 1956, instigated by budgetary imbalances culminating into huge yearly deficits. As future projections for Public Debt shows that it is likely to touch the colossal figure of Rs250000 crores in 2020 as against Rs210789 crores in 2017-18. The deficit debt fiasco originates from the revenue expenditure mismatch as reflected by the fiscal indicators is the fountain of the deteriorating financial position of the state giving rise to propulsion in Public Debt beyond sustainable limits. Additional revenue mobilization and control of Public Expenditure have therefore become urgent necessity to address this debacle. The state cannot completely do away with additional resource mobilisation through borrowings at this juncture. Therefore it is imperative to consolidate the fiscal position by effective Debt Management, embracing financial prudence, professionalism and sanctity of legislative sanction. The present papers attempts to analyse the impact of Public Debt on the Finances of the State in sustainable Debt Management and fiscal consolidation.

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