The Kerala state government reported that the state's total public debt has risen to Rs 5.07 lakh crore [1].

The findings, detailed in a White Paper released by the Finance Department, signal a serious fiscal strain for the region. This level of indebtedness threatens the state's long-term economic sustainability, and its ability to service existing obligations.

The document was tabled in the Kerala Legislative Assembly on Thursday. According to the report, the state is facing a debt crisis driven by rapidly rising liabilities and a substantial accumulation of arrears [2].

Specifically, the White Paper identifies arrears of Rs 48,733 crore inherited from the previous government [2]. These figures highlight the precarious nature of the state's balance sheet as it attempts to manage public spending alongside these mounting costs.

Officials said the report exposes the extent of the financial instability currently affecting the state's treasury. The rising debt levels create a restrictive environment for new infrastructure projects and social welfare spending, which are key pillars of the regional economy.

The Finance Department said the disclosure is necessary to address the systemic issues causing the deficit. By quantifying the total debt and the specific arrears, the government aims to outline the scale of the challenge facing the current administration [1].

The report also touches upon the role of the Kerala Infrastructure Investment Fund Board, suggesting that political bias has influenced fiscal outcomes [2]. This adds a layer of political complexity to the economic recovery efforts as the state seeks to stabilize its finances.

“The state's total public debt has risen to Rs 5.07 lakh crore.”

The revelation of such high public debt and significant inherited arrears suggests that Kerala may face reduced borrowing capacity and stricter fiscal oversight from central authorities. If the state cannot implement a sustainable debt-reduction strategy, it risks a credit downgrade or a liquidity crisis that could curtail essential public services.