Kerala's debt balloons as white elephant projects drain coffers

Govt allocation for medical aid for sexual assault victims falls short
Representational image. File Picture.

Kerala has been splurging crores of rupees on white elephants even as the Finance Minister has been lamenting the Centre's apathy towards the State's financial health.

The government's 'squandering' has not gone unnoticed. The Communist Party of India (CPI), the second largest constituent in the ruling Left Democratic Front, has raised questions over the chief minister's 40-vehicle motorcade.

A State cabinet meeting that requested the central government to allow Kerala to stretch its borrowing limit itself passed the decision to hike the salaries of ministers and MLAs! Questions have been raised over the Rs 42.90 lakh manger constructed at the Cliff House, the chief minister's official residence. The amount could have been utilised for the benefit of the homeless, the "detractors" wondered. Crores are being pumped into K-Rail over the past five years, even though not a single project has materialised.

Finance Minister K N Balagopal recently blamed the Centre for putting the State in a grave financial crisis by slashing its resources by Rs 23,000 crore in the current financial year. "It will be difficult to find resources to fund the welfare schemes for the poor, construction of houses, education, healthcare, etc.," he told the legislative Assembly on July 21.

Narendra Modi and KN Balagopal.
PM Narendra Modi (left) and Kerala Finance Minister K N Rajagopal (right). File Photo.

A few days before Balagopal's statement in the Assembly, K B Ganesh Kumar of the LDF brought another issue to the attention of the House. Drawing attention to the first Pinarayi government's plan to utilise paddy fields lying fallow, Kumar sought to know the details of paddy fields currently under cultivation.

"Kottarakkara has an additional director for paddy development. But paddy is not cultivated in Kottarakkara municipality or the adjacent two panchayats. Pandalam has a deputy director, staff and office to encourage sugarcane farming. Pandalam, however, does not have sugarcane cultivation. The government should not allow such squandering from the exchequer," the Pathanapuram MLA said.

Kumar further explained that "Rs 30 lakh has been allotted for paddy cultivation at a block in my native place. The entire amount has been spent in three years. At a harvesting fest, I enquired about the paddy that has been harvested. The Kudumbashree reprsentatives told me that the harvested paddy went into the making of "paal payasam" (a dessert). Rs 30 lakh was spent on "paal payasam" relished by Kudumbashree workers and labourers engaged under the Employment Guarantee Scheme. This money was from the exchequer," he pointed out.

Lessons from Sri Lanka
A recent report prepared by a group of economists at the behest of Dr Michael Debabrata Patra, Deputy Governor of the Reserve Bank of India, warned of the consequences of a soaring public debt.

Representational image. File Photo.

"The crisis in Sri Lanka reminds us of the need for keeping public debt within the limits. The debts of five States, including Kerala, are more than their Gross State Domestic Product. This is a serious situation, and unnecessary expenses should be immediately cut down," the report said.

Waking up late
Kerala, so far, has been dependent on the GST compensation from the Centre and borrowings. The GST compensation period has ended, and the central government has put a ceiling on borrowings, and the State has now woken up to the need for increasing its revenues.

Representational image. Photo: Canva

Still, it has done nothing to avoid unnecessary expenses. Even as the welfare pension schemes are running into a crisis, the State has not cut down on luxuries. The CPM, which earlier used to intervene and correct whenever the ruling dispensation goes awry, now seems to be unwilling to advise the government.

Crores for nothing

The Kerala Rail Development Corporation Limited (K-Rail), floated as a joint venture (JV) of the State and central governments in January 2017, has not implemented even a single project in the past five years.

Article image Haritha
Representational image. File Photo.

According to government statistics, K-Rail requires Rs 46 lakh a month for maintaining its office and paying its employees. Over the past five years, the amount spent for this purpose alone was Rs 27.60 crore.

The JV's focus project, SilverLine, a 530-kilometre, semi-high-speed rail corridor connecting Kasaragod in the north with Thiruvananthapuram, the southernmost district, now seems to be on its deathbed.

The government spent Rs 13.50 crore a year to run K-Rail's office and to pay the salaries. The amount shelled out was for a project that has not received the central government's approval. The State government could justify that the salaries paid were for the work done and not for a project without approval.

Besides the money spent on salaries and maintaining the office, the government has also shelled out Rs 48.22 crore, including the consultancy fee of Rs 20.5 crore, on the project. The amount so far pumped into the project adds up to Rs 90 crore.

Loka Kerala Sabha another drain on exchequer?

The opposition parties cited overspending as they boycotted the second edition of Loka Kerala Sabha in 2020. The government had spent Rs 2.03 crore for the first Sabha in 2018. With the excessive spending becoming a point of discussion, the authorities reduced the expenditure for the second Sabha to Rs 1.11 crore.

Kerala CM Pinarayi Vijayan (TV grab)

The third Loka Kerala Sabha was held in June this year. The chief minister did not provide a specific answer to a question raised on the floor of the House on the expenditure incurred for holding the Sabha. He informed the Assembly that it was being compiled.

Though the chief minister did not have a specific answer on the expenditure, LDF's independent MLA P V Anwar had the stats: "Rs 4 crore was spent on the third Loka Kerala Sabha," he said in the Assembly. According to the MLA, the Sabha cost each Malayali just Rs 1.14. "Could this be termed squandering," he asked.

Interestingly, it is not known how Anwar got the expenditure account which was not available to the chief minister. If his stats are correct, the third Sabha's expenditure was four-fold over the second one.

Grounded fancy ride

The State government took a helicopter on a monthly rent of Rs 1.44 crore for a year during the pandemic crisis in 2020. The chopper, the government explained, would be used for aerial surveillance, monitoring the movements of Maoists, shifting of patients, keeping an eye on the State borders, coastal, forest and tourism areas, besides for facilitating the movements of police in emergency situations and VIPs.

Former Director-General of Police used the helicopter to see the Maoist areas in Wayanad just before his retirement from service. The helicopter, rented without floating a tender, was used only for five times in the first six months. The chopper remained grounded during the last five months of the rental period due to COVID-19 crisis.

The chopper was supposed to be used for 240 flying hours in one year. According to government statistics, it was airborne only for 105.3 hours. The spent Rs 22.22 crore for its rental, expenditure and parking fee.

The government has now completed the tendering process for renting another helicopter for three years. The rent fixed is Rs 80 lakh for 20 flying hours a month, and Rs 90,000 for each additional hour. The government, however, has not made a final call fearing controversy.



Total Debt Of Kerala has touched Rs 3,32,291 crore, a 13-fold increase in 20 years.


Financial Year | Debt (in Rs)


2021-22 -- 3.32 lakh crore

2020-21 -- 2.96 lakh crore

2019-20 -- 2.60 lakh crore

2018-19 -- 2.35 lakh crore

2017-18 -- 2.14 lakh crore

2016-17 -- 1.89 lakh crore

2015-16 -- 1.60 lakh crore

2014-15 -- 1.42 lakh crore

2013-14 -- 1.24 lakh crore

2012-13 -- 1.08 lakh crore

2011-12 -- 93,211 crore

2010-11 -- 82,486 crore

2009-10 -- 75,055 crore

2008-09 -- 66,304 crore

2000-01 -- 25,754 crore


Sources of borrowing | Amount


Market borrowing: 1,85,207 crore

Small savings/PF: 98,094 crore

National Social Security Fund: 21,095 crore

Central govt loans/advances: 17,397 crore

Bank loans: 5,861 crore

Public deposits: 4,509 crore

Contingency fund: 100 crore

Consolidated fund: 17 crore


Guest house
The Home Department liberally spends on money on the police force. The force has three swimming pools in a four kilometer radius in Thiruvananthapuram city.

It maintains a guest house, PT Com — Police Training College Officers' Mess — exclusively for Indian Police Service officers at Vazhuthacaud. The building was originally meant to be the official residence of the State police chief. P K Hormis Tharakan had stayed in the four-bedroom building when he was the DGP.

Raman Srivastava, who later became the DGP, converted the building to a guest house after an astrologer ruled the building unfit for being a residence. Six additional air-conditioned rooms were also added to the building.

The Kerala Police have another guest house, called Safe House, on Shanghumugham Beach. It has four air-conditioned rooms. The PT Com and Safe House are being maintained by police personnel.

The Chandrasekharan Nair stadium has yet another accommodation facility for police personnel. It has six rooms, including four suites. If other government departments, too, decide to have more guest houses, it would have an adverse impact on the exchequer.


Coordination: V R Prathap

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