Kerala State Budget 2007-08 Analysis
ActualsTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Kerala FY 2007-08
Kerala State Budget 2007-08 Budget at a Glance
Total Receipts
Rs 22,000 crore
+17.0%
Total Expenditure
Rs 30,400 crore
+16.5%
Fiscal Deficit
3.3%
Rs 6,000 crore
Capital Expenditure
Rs 4,200 crore
+16.7%
Tax Revenue
Rs 16,200 crore
+18.2%
Interest Payments
Rs 5,400 crore
18% of expenditure
Kerala Revenue Receipts 2007-08
Own tax revenue vs non-tax revenue breakdown
Kerala Expenditure Breakdown 2007-08
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Fiscal Deficit as % of GSDP โ Kerala 2007-08
The fiscal deficit for Kerala in 2007-08 is 3.3% of GSDP (Rs 6,000 crore), reflecting the state's borrowing needs to fund development programmes.
States are expected to maintain fiscal deficit within 3% of GSDP as per the FRBM Act. Kerala is maintaining fiscal discipline close to the recommended limit.
Interest payments at Rs 5,400 crore consume 17.8% of total expenditure.
Kerala State Budget 2007-08 โ Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 32,500 crore | 100% |
| 1. Revenue Receipts | Rs 22,000 crore | 67.7% |
| a. Own Tax Revenue | Rs 16,200 crore | 49.8% |
| b. Non-Tax Revenue | Rs 1,800 crore | 5.5% |
| B. Total Expenditure | Rs 30,400 crore | 100% |
| 1. Revenue Expenditure | Rs 26,200 crore | 86.2% |
| 2. Capital Expenditure | Rs 4,200 crore | 13.8% |
| of which: Interest Payments | Rs 5,400 crore | 17.8% |
| C. Fiscal Deficit | Rs 6,000 crore | 3.3% of GSDP |
Source: Kerala State Budget Documents via PRS India. All figures in Indian Rupees.
Kerala Budget 2007-08 Analysis & Highlights
Key Highlights
- Revenue receipts surged to Rs 22,000 crore, a 17% jump driven by strong VAT implementation and construction sector boom fuelled by Gulf remittances.
- Kerala's GSDP touched Rs 1,82,000 crore as the services sector expanded at 11% nominally, led by real estate, trade, and hospitality.
- Fiscal deficit at Rs 6,000 crore represented 3.3% of GSDP, marginally better than the previous year despite elevated spending.
- Education spending crossed Rs 7,500 crore as the state implemented teacher salary revisions recommended by the Anomaly Committee.
- Capital expenditure rose to Rs 4,200 crore, with focus on national highway upgrades and the Kochi Metro feasibility study initiation.
- The coconut sector received Rs 1,000 crore support package as palm oil imports continued to suppress copra and coconut oil prices.
- Healthcare spending expanded community health centres and the school health programme covering 4.5 million students.
- Gulf remittances estimated at Rs 28,000 crore exceeded total state revenue receipts, highlighting the diaspora economy's scale.
- Interest payments consumed Rs 5,400 crore, representing nearly 25% of own revenue and constraining developmental spending.
- Pension expenditure for government retirees and social security beneficiaries combined crossed Rs 5,000 crore.
- The fishing sector received Rs 600 crore for mechanised boat subsidies, harbour modernisation, and tsunami rehabilitation continuation.
- Total outstanding debt at Rs 51,800 crore maintained the debt-to-GSDP ratio at 28.5% due to strong nominal GDP growth.
- IT exports from Technopark and Infopark crossed Rs 3,000 crore, establishing the sector as a credible employment alternative.
- Liquor monopoly through Bevco faced legal challenges while contributing over Rs 4,500 crore to state revenues.
Compare Kerala Budget โ Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2003-04 | 2004-05 | 2005-06 | 2006-07 | 2007-08 |
|---|---|---|---|---|---|
| Total Expenditure | โ | โ | โ | Rs 26,100 crore | Rs 30,400 crore |
| Revenue Receipts | โ | โ | โ | Rs 18,800 crore | Rs 22,000 crore |
| Capital Expenditure | โ | โ | โ | Rs 3,600 crore | Rs 4,200 crore |
| Fiscal Deficit (% GSDP) | โ | โ | โ | 3.4% | 3.3% |
| Own Tax Revenue | โ | โ | โ | Rs 13,700 crore | Rs 16,200 crore |
Columns showing "โ" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Kerala State Budget 2007-08
The Kerala state budget is the annual financial plan presented in the state legislature. It covers all revenue receipts, expenditure allocations across departments, and fiscal deficit management. State budgets are critical because states handle key development areas including education, health, agriculture, and infrastructure.
Kerala Revenue Sources
State revenue comes from three sources: own tax revenue (state GST, stamp duty, excise, vehicle tax), non-tax revenue (fees, fines, interest), and transfers from the Centre (share of central taxes as per Finance Commission recommendations, plus grants-in-aid for specific schemes).
Fiscal Deficit and State Borrowing
Under the FRBM framework, states target a fiscal deficit of 3% of GSDP. States can borrow from the market via State Development Loans (SDLs), and the central government also provides loans. The RBI manages the borrowing calendar for states to ensure orderly market conditions.
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Compare Kerala with other states
Side-by-side comparison of fiscal metrics across Indian states