Kerala Budget - FY 21-22

Key Takeaways:

- Economy of Kerala
- Budgeted Expenditure and Receipts
- Tax Reforms and Major State Tax Revenues
- Sectoral Expenditure
- Specific Policies

1. Kerala Budget - FY 21-22 CA Divakar Vijayasarathy

2. Research Credits Gracelin Lita CA Jugal Gala

3. Legends used BE Budgeted Estimates CNG Compressed Natural Gas GSDP Gross State Domestic Product LNG Liquid Natural Gas

4. Presentation Schema

5. Outlook

6. Introduction

7. From the Office of CM “The COVID response has showcased the excellence of our health sector before the world” “We are creating a new edition to the Kerala development model. We will transform into knowledge based society, with strides in modern employment opportunities and industrial growth while consolidating our achievements in the social sector”

8. Economy GSDP (at constant prices) 2019-20 : 3.4% 2018-19 : 6.5% Per capita GSDP (at current prices) 2019-20: Rs.2,45,323 (8% higher than that of 2018-19) Contributing sectors Agriculture – 9% Manufacturing – 28% Services – 62% Unemployment 2018-19 : 9% (India average: 5.8%)

9. Growth in GSDP

10. Budget Highlights and Estimates

11. Budget Highlights

12. Budget Estimates for 2021-22 In 2021-22, the outstanding debt is expected to be 37.4% of the GSDP, higher than the revised estimate for 2020- 21 (36.1% of GSDP). The outstanding debt is estimated to increase from 29.8% in 2018-19 to 37.4% in 2021- 22.

13. Expenditure Estimates *Expenditure which leads to the creation of assets (such as bridges and hospitals)

14. Sectoral Expenditure Sector Budget Provisions 2021-22 Activity/scheme Amount allocated (Rs. in crores) Education, Sports, Arts, and Culture School education 1,655 Sports and Youth welfare 120 Cultural sector 157 Social welfare and nutrition Welfare of children 1,613 Health and Family welfare National Health Mission 811 Renovation of medical colleges 420 Renovation of dental colleges 20 Agriculture and allied activities Crop husbandry 1,830 Food subsidy 1,523 Rural development MGNREGA 4,057 Housing scheme 570

15. Contd… Sector Budget Provisions 2021-22 Activity/scheme Amount allocated (Rs. in crores) Transport Capital outlay on roads and bridges 1,640 Police Modernisation of police 45 Water Supply, Sanitation, Housing, and Urban Development AMRUT scheme 720 Smart cities mission 400 Welfare of SC, ST, OBC, and Minorities Housing scheme 440 In 2021-22, Kerala is estimated to spend Rs 84,778 crore on committed expenditure , which is 66% of its revenue receipts . This is 25% higher than the revised estimates of 2020-21. This comprises spending on salaries (31% of revenue receipts), pension (18%), and interest payments (17%). In 2021-22, payments towards salaries are estimated to increase by 42% over the revised estimates of 2020-21.

16. Receipts in 2021-22 69% 31% 13% 18%

17. Break up of State Government Receipts

18. Receipts and Payments Account

19. Receipts and Payments Account

20. Tax Reforms and Policy Initiatives

21. Tax Reforms Total own tax revenue of Kerala is estimated to be Rs 73,121 crore in 2021-22, an increase of 62% over the revised estimates of the previous year In 2020-21, as per the revised estimates, state’s own tax revenue is estimated to be 33% less than the budget estimates

22. Major State Tax Revenues: 2019-20

23. Other Policy Highlights

24. Comparison of States’ Expenditure on Key Sectors Sector 2019-20 Actuals (as % of total expenditure) Allocation by Kerala – 2021-22 BE (as % of total expenditure) States’ average Education 16.6% 15% 15.8% Health 6.7% 5.6% 5.5% Agriculture 4.6% 5.1% 6.3% Rural development 1.9% 4.4% 6.1% Police 3.1% 2.8% 4.3% Roads and bridges 3.7% 3.2% 4.3%

25. Way Forward

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