Kerala’s Debt Declines as Union Data Counters ‘Debt Trap’ Claims

The union government has acknowledged that Kerala's public debt is decreasing. In a reply to MP V. Sivadasan, the Ministry of Finance stated that Kerala’s debt has reduced in proportion to its GSDP (Gross State Domestic Product). In 2020–21, the debt was 40.3% of the GSDP, which decreased to 36.8% in the current financial year.

Kerala has performed better in reducing debt compared to states like Tamil Nadu, Maharashtra, and Telangana. Currently, the state’s total debt liability stands at Rs.4.7 lakh crore. In comparison, Tamil Nadu has Rs. 9.6 lakh crore, Uttar Pradesh Rs. 8.6 lakh crore, Maharashtra Rs. 8.1 lakh crore, Karnataka Rs.7.3 lakh crore, and West Bengal Rs. 7.1 lakh crore in debt. Kerala ranks 10th in the list.

These figures, revealed by the union government, disprove the false propaganda that Kerala is caught in a debt trap, said V. Sivadasan. The reply also included data on the union government’s debt, which has decreased from Rs. 121.9 lakh crore in 2020–21 to Rs. 85.9 lakh crore in 2024–25.