Salaries, pensions and interest payments together consumed 77.6% of revenue receipts in 2024-25, the report said. Salaries stood at ₹39,904 crore, pensions at ₹27,885 crore and interest payments at ₹29,138 crore for a combined ₹96,927 crore. The share is projected at 77% in 2025-26 revised estimates.
Kerala’s committed expenditure burden is more than one-and-a-half times the national average of 46.1%, leaving barely one rupee in four for schools, hospitals, roads and welfare, it added. Development spending stood at just 39.9% of total disbursements – about three-fifths of the national average of 63.5%, the report said.
Kerala Infrastructure Investment Fund Board poses a structural risk, the report flagged. The body was set up to raise funds outside the state’s borrowing limits but operates without the oversight and controls that apply to the budget. Its borrowings are kept off the official books, giving an incomplete picture of the state’s actual debt, it said.
Kerala’s public sector units are a long-overdue drain on finances, the report said. It also said that the state’s social indicators – literacy, infant mortality and gender parity – remain strong.
Former finance minister KN Balagopal said the report was prepared by outsiders and that internal financial data should not have been shared with them. He called it a political document. However, Satheesan said the report was prepared under the supervision of the finance department and drew only from publicly available documents such as budget documents.
