During 2011-12, Kerala borrowed Rs 8,880 crore from the market but net availability of funds was only Rs 4,426 crore.
Increasing revenue and fiscal deficits continue to show growing fiscal imbalance in the State, according to a CAG report. Ratio of revenue deficit to fiscal deficit too has grown, pointing to use of borrowed funds largely for meeting current expenditure.
Maturity profile of debt indicated that the State would have to repay 49.6 per cent during the next one to seven years. The CAG report on State finances for year 2012 was tabled in the State Assembly on Monday.
There has been a decline in net availability of funds from borrowings since a large portion is used for debt servicing. During 2011-12, the State borrowed Rs 8,880 crore from the market but net availability of funds was only Rs 4,426 crore. A larger part could not be used for developmental activities and was instead used for non-developmental purposes.
Investments in statutory corporations, own companies, joint stock companies and cooperatives amounted to Rs 4206.43 crore. Average return on these was 1.3 per cent during last five years. But interest outgo on borrowings ranged from 7.2 per cent to 7.9 per cent.
Outstanding loans and advances to entities referred above amounted to Rs 9,404 crore, up by Rs 943 crore. As much as 65 per cent went to Kerala State Road Transport Corporation, Kerala Water Authority, Kerala State Electricity Board and Kerala State Housing Board.
Ratio of financial assets to liabilities has deteriorated, indicating the lack of adequate asset backup for liabilities. Revenue receipts have increased by 22.65 per cent over those of previous year.
Tax and non-tax revenue have looked up. But revenue receipts as a percentage of gross state domestic product (GSDP) declined. This indicated that the growth in tax revenue had not kept pace with that of gross state domestic product, the report said.
Revenue expenditure leapt up by 32.83 per cent. Of the total expenditure of Rs 50,896 crore, it accounted for 90.47 per cent. Nearly 70 per cent was spent on salaries, wages, pension payments, interest payments and subsidies.
Capital expenditure has gone up by 14.54 per cent to Rs 3,853 crore and accounted for eight per cent of total expenditure.
As a proportion of GSDP, revenue deficit increased to 2.5 per cent and fiscal deficit to 3.9 per cent respectively from 1.3 per cent and 2.3 per cent in the previous year.