CAG calls out Kerala's tardy revenue collection, arrears exceed Rs 28,000 crore 

In terms of revenue growth, the state’s own tax revenue experienced a significant growth of 22.41 per cent in 2021-22, rising from Rs 47,660.84 crore in the previous year to Rs 58,340.52 crore.

Published: 15th September 2023 07:10 AM  |   Last Updated: 15th September 2023 07:11 AM   |  A+A-

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By Express News Service

THIRUVANANTHAPURAM: Highlighting the lethargic approach of the state government in addressing pending arrears, the Comptroller and Auditor General of India (CAG) raised concerns over Kerala’s mounting revenue arrears, which now stand at a staggering Rs 28,258.39 crore. This financial burden comes at a time when the state is grappling with severe fiscal crisis. The compliance audit report from the CAG for the 2021-22 fiscal, presented in the assembly on Thursday, reveals these arrears account for a substantial 24.23 per cent of the state’s total revenue.

These arrears are spread across 17 departments or heads of accounts. Notably, the SGST Department holds the highest arrears at Rs 13,410.12 crore, followed by MVD with Rs 2,868.47 crore. Additionally, arrears related to electricity taxes and duties amount to Rs 3,118.50 crore.

The report called for urgent intervention from the state government to clear the arrears. “The absence of prompt reporting of arrears to the Revenue Department and tardy pursuance by the departments concerned for realising the arrears are the main reasons for the pendency,” the report said.

Of the total arrears, Rs 6,267.31 crore, which accounts for 33.74 per cent, is pending due to stay orders. The report calls upon the relevant departments to take effective action to lift these stay orders and recover the outstanding amounts.

Revenue growth

In terms of revenue growth, the state’s own tax revenue (SOTR) experienced a significant growth of 22.41 per cent in 2021-22, rising from Rs 47,660.84 crore in the previous year to Rs 58,340.52 crore. This substantial growth was primarily attributed to the recovery from the negative impact of the COVID-19 pandemic in the preceding year.

The report reveals that State Goods and Services Tax (SGST) constituted 41 per cent of Kerala’s own tax revenue in 2021-22, followed by sales tax at 39 per cent, stamps and registration at 8 per cent, and vehicle taxes at 7 per cent. However, when compared to the pre-Covid period of 2018-19, the growth rate in Own Tax Revenue (SOTR) was 15 per cent. The report also highlights that the share of SOTR in the state’s total receipts decreased from 56 per cent in 2017-18 to 50 per cent in 2021-22, suggesting that the SOTR did not grow significantly in real terms as it did before the COVID-19 pandemic.

The total revenue receipts of the state in 2021-22 amounted to Rs 1,16,640.24 crore, marking a 19.49 per cent increase from the previous year and a 25.62 per cent rise from the pre-Covid year of 2018-19. Of this, tax revenue generated by the state amounted to Rs 68,803.03 crore, while receipts from the central government stood at Rs 47,837.21 crore. State-generated revenue, including OTR and non-tax revenue, constituted 59 per cent of the state’s total revenue receipts, while the remaining 41 per cent came from the central government, including the net proceeds of divisible Union taxes and duties and grants-in-aid.

Regarding non-tax revenue (SNOTR), the state’s SNOTR for 2021-22 reached Rs 10,462.51 crore, representing a substantial increase of 42.79 per cent compared to the previous year. This surge was mainly attributed to the increased revenue from state lotteries, a significant component of SNOTR, which reached Rs 7,134.93 crore compared to the previous year’s Rs 4,873.01 crore.


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A performance audit report by the CAG called for a full transition to Direct Benefit Transfer (DBT) for Kerala’s social security pension payments. According to the “Performance Audit on Direct Benefit Transfer of Social Security Pension Schemes” by the CAG, cash payments through Primary Agricultural Credit Societies in direct-to-home mode did not qualify as DBT as they were not made directly to beneficiaries, without reducing intermediary levels. The report also revealed that 9,201 service pensioners and government employees got Social Security Pension irregularly between 2017-18 and 2019-20, amounting to D39.27 crore in disbursements.

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