Kerala's public debt has reached ₹5.07 lakh crore, according to a new White Paper.
The report highlights high liabilities, low capital spending and losses in public sector entities.
The document has triggered a political confrontation between Satheesan and former CM Pinarayi Vijayan.
The White Paper tabled by new Kerala Chief Minister V.D. Satheesan painted a grim picture of the state's fiscal position. He stated that the new United Democratic Front (UDF) government had inherited a state grappling with a severe financial crisis marked by mounting debt and rising liabilities.
The report revealed that Kerala's total public debt has reached ₹5.07 lakh crore, while nearly 77% of the state's revenue is being spent on committed expenditure such as salaries, pensions and interest payments. This leaves little room for developmental spending.
The state's capital expenditure, which refers to spending on developmental activities, is among the lowest in the country and stands at just 1.3% of the Gross State Domestic Product (GSDP). Kerala also runs one of the highest fiscal deficits in the country.
Highlighting the severity of the treasury crisis, the report noted that the state relied on Ways and Means Advances for 262 days in 2025 and remained in overdraft for 84 days during the year.
The Chief Minister also said that his government had inherited pending liabilities of ₹48,733 crore, including DA and DR arrears payable to government employees and pensioners.
Mounting Losses
The White Paper highlighted the mounting losses faced by public sector entities in Kerala. The Keralam Infrastructure Investment Fund Board (KIIFB) has outstanding loan liabilities of around ₹21,000 crore.
The cumulative losses incurred by Kerala's public sector enterprises amount to ₹78,851 crore. The Keralam State Road Transport Corporation (KSRTC) and the Keralam Water Authority account for a major share of these losses.
The report also flagged reduced expenditure on welfare schemes benefiting marginalised communities such as Scheduled Castes, Scheduled Tribes and minorities. Lower-than-expected revenues and reduced assistance from the Centre have further exacerbated the crisis.
Satheesan vs Vijayan
Speaking in the Assembly, Satheesan described White Papers tabled by previous governments as political documents.
“In the past, several White Papers presented before the Assembly were political documents. This is not a political White Paper,” the Chief Minister said.
He also stated that the government had enlisted the help of three experts to prepare the document.
“This document is intended to serve as a basic roadmap for building the future of Kerala,” he added.
Responding to the criticism, Leader of the Opposition and former Chief Minister Pinarayi Vijayan alleged that the government had bypassed established norms while presenting the paper.
“This is not about following your policy. The question is whether proper procedures were followed,” Vijayan said.
