FISCAL CRISIS IN

KERALA

AN INTRODUCTION TO KERALA’S FISCAL CRISIS

PRESENTED BY

GEORGI MATHEW VARUGHESE

3RD BA ECONOMICS

Bishop Abraham Memorial College

Thuruthicad

Thanks To …….

ALL THE THEACHERS IN DEPARTMENT OF ECONOMICS B.A.M COLLEGE, THURUTHUCADU.

MY FRIENDS IN 3RD BA ECONOMICS B.A.M COLLEGE……..

AN INTRODUCTION TO FISCAL CRISIS

IN KERALA

1. What is fiscal deficit?

2. A walk to fiscal crisis

3. Is Kerala in a fiscal crisis?

4. What can we do to overcome this crisis ?

What is fiscal deficit?

• Annual borrowing of the government

• Government expenditure is greater than the

total revenue

Fiscal deficit is an economic phenomenon, where the Government's total

expenditure surpasses the revenue generated . It is the difference between the

government's total receipts (excluding borrowing) and total expenditure. Fiscal

deficit gives the signal to the government about the total borrowing

requirements from all sources.

A walk to fiscal crisis

• Budgetary deficit since 1970’s

• It was peek in 2006 – 2007

• More welfare activities needs more money

• Repaying interests – liabilities

Is Kerala in a fiscal crisis?

• Revenue deficit during last 5 years

• Fiscal deficit is increasing every year

0.00

2000.00

4000.00

6000.00

8000.00

10000.00

12000.00

14000.00

Revenue Deficit Fiscal Deficit

Trend in Deficit Indicators

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2000

4000

6000

8000

10000

12000

14000

16000

Revenue deficit Fiscal deficit Primary deficit

FISCAL DEFICIT IN KERALA

2011 – 2012 2012 - 2013

Is Kerala in a fiscal crisis?

• Revenue deficit during last 5 years is not

decling

• Fiscal deficit is increasing every year

• Kerala is in fiscal deficit and on the path to a

crisis

Projected fiscal deficit of Kerala by Kerala

public expenditure review committee

What can we do to overcome this crisis?

• Efficient management of government

expenditures

– Avoid mismanagement

• Government should not promote

disinvestment

THANK YOU.