Thiruvananthapuram: Kerala's revenue has increased during the first five months of the financial year, but the state continues to face financial strain as unavoidable expenses such as salaries, pensions and interest payments have also risen.

According to figures released by the Accountant General, the state's revenue receipts increased to ₹51,840 crore between April and August this year, from ₹47,695 crore during the corresponding period last year. This represents an increase of ₹4,145 crore, or 8.69 per cent.

The state's own tax revenue, a key component of its financial growth, rose 7.84 per cent from ₹30,850 crore to ₹33,268 crore. The increase was mainly driven by the usual growth in Kerala Goods and Services Tax (KGST) and motor vehicle tax collections.

However, revenue expenditure increased at a faster pace, rising 8.92 per cent from ₹62,810 crore to ₹68,410 crore. As a result, the revenue deficit, which represents the gap between revenue receipts and revenue expenditure, increased 9.60 per cent to ₹16,570 crore from ₹15,114 crore during the same period last year.

The fiscal deficit also widened by 10.84 per cent, from ₹19,384 crore to ₹21,485 crore.

Development expenditure increased 5.81 per cent, from ₹4,555 crore to ₹4,820 crore. However, this accounts for only 24.45 per cent of the budget allocation.

The state borrowed ₹19,850.40 crore during the first five months of the current financial year, compared with ₹18,120 crore during the corresponding period last year.

Kerala's share of central taxes increased 12.48 per cent to ₹8,420 crore. However, the state has seen a decline in central grants due to delays in receiving funds under centrally sponsored schemes and a reduction in revenue deficit grants.

The government had pumped a substantial amount of money into the Onam market last month. Whether this will be reflected in higher tax collections will become clear when the revenue figures for the current month are released. Traders are scheduled to file their GST returns this month.

The state government has to spend 78.4 per cent of its total revenue receipts on salaries, pensions and interest payments on its debt alone, leaving limited room for other expenditure.