Damocles’ sword over Kerala’s fortunes

The article details the severe fiscal crisis in Kerala, marked by high debt, significant fiscal and revenue deficits, and low capital expenditure. It highlights challenges from autonomous bodies like KIIFB and Public Sector Enterprises (PSEs), low tax buoyancy, and underutilization of central funds. The analysis proposes immediate and long-term solutions, including improving tax and non-tax revenue collection, optimizing expenditure through pension reform, and exploring new financing avenues like diaspora and municipal bonds, to address the state's financial stress and unlock its development potential.