Thiruvananthapuram: Kerala's growth rate increased to 12.1 per cent in 2021-22 reviving from the financial crisis caused by the Covid-19 pandemic.
The State Domestic Product improved to 12.1 per cent from 9.2 per cent during the financial year 2021-2022, states the Economic Review tabled in the Kerala Legislative Assembly on Thursday prior to the presentation of the State Budget.
This is the highest ever growth rate achieved after 2012-13. The relief packages granted despite the financial crisis faced by the state helped growth to pick up, the Economic Review said.
(State Domestic Product, or SDP, is the total value of goods and services produced during any financial year within the geographical boundaries of a state. Negative growth in the economy occurs when the Gross/State Domestic Product reduces year over year. It is expressed as a percentage over a period of time.)
Agriculture and allied activities, and industries sector registered a positive growth after falling on a negative trajectory the previous fiscal. Industries sector grew by 17.3%.
The economic package of Rs 20,000 crore and the Rs5650 package for industries aided the growth of the state, the report said.
The Economic Review also pointed out that the per capita income of a person is more than the national average in Kerala.
The gap between the fiscal deficit and revenue deficit reduced by 4.1% during this period.
Meanwhile, the domestic debt increased by 10.67% in 2021-22.
Cuts in borrowing limit
Kerala Finance Minister K N Balagopal on Thursday said the Centre's imposition of cuts in the borrowing limit of the states would adversely impact the southern state's economy.
The BJP-led union government adopted a "wrong policy" to reduce the state's borrowing capacity after including the loans taken by the special purpose vehicles like Kerala Infrastructure Investment Fund Board and Kerala Social Security Pension Limited within the state government's overall borrowing limit, he told the state Assembly.
"The cutting down of the borrowing capacity of states to three per cent from the previous five per cent will adversely impact the state's economy," Balagopal said during Question Hour.
Despite repeated requests to restore the previous borrowing limit of the states and to avoid the inclusion of the loans taken by the KIIFB and KSSPL in the state's overall borrowing, the union government had not taken any favourable step, he said.
Chief Minister Pinarayi Vijayan had sent a letter to Prime Minister Narendra Modi with the state's request in this regard, he said.
Balagopal also said he himself sent a letter to Union Finance Minister Nirmala Sitharaman but the Centre has made no change in their stand so far.
Noting that the state budget is prepared based on the borrowing limit being fixed by the Finance Commission, the Minister said loans taken in this manner are mainly used for infrastructure development.
Imposing cuts in the borrowing limit of the state after the Assembly passed the budget would derail the infrastructure development of the state and cause delay in the completion of the ongoing projects, he explained.
Besides availing loans, the state government is making all efforts to find funds for the development projects by increasing tax and non-tax revenue, reducing unwanted expenses and mobilising maximum resources, the finance minister added.