Thiruvananthapuram: Kerala has failed to meet fiscal deficit targets and capital expenditure on development declined during the last four years while debt liability increased, a CAG report said.
According to the report on state finances for the year ended March 31, 2015, tabled Wednesday in the state assembly, even for meeting primary expenditure, Kerala has depended on borrowed funds since 2011-12.
The report by the Comptroller and Auditor General of India (CAG) said non-realisation of estimated revenue receipt led to non-achievement of revenue and fiscal deficit targets envisaged in the Kerala Fiscal Responsibility Act, 2011.
Steep increase in state government's open market borrowings started from 2007-08 and "this will have adverse impact on state finances from 2016-17 onwards", it said.
The state has to ensure additional revenue resources to meet this debt burden, the report said.
The state's total receipts for the year ended March 31, 2015 stood at Rs 79,306 crore, including the major share of revenue receipt of Rs 57,950 crores.
While revenue receipt recorded a growth of 18 per cent, growth rate of own tax revenue was only 10 per cent, the report said.
On expenditure side, the report said total expenditure of the state almost doubled during the last five years.
The share of revenue expenditure in total expenditure was above 90 per cent and reached a high of 93.5 per cent in 2014-15.
"This shows low priority of the state government for capital expenditure," it said.
Out of the 80 per cent non-plan revenue expenditure, 60 per cent was incurred on salaries, wages, pension and interest payments, which showed a higher growth due to mounting liability in view of increased open market borrowings.
Capital expenditure on development showed a declining trend since 2012-13. In 2014-15, it was Rs 26 crore less then the previous year, the report said.
State's debt liability recorded an increase of 14.4 per cent and rose from Rs 1,24,081 crore in 2013-14 to Rs 1,41,947 crore in 2014-15.
This liability as a percentage of GSDP was 31.4 per cent, which is higher than the target of 29.8 per cent fixed in the Kerala Fiscal Responsibility Act.
Total borrowed funds under 'Public Debt' was Rs 18,509 crore during 2014-15.
The debt maturity profile of the state showed that 44.1 per cent, that is Rs 42,362 crore of the debt, has to be repaid within seven years.