Kerala’s Fiscal Stress

Despite “good tax effort” and faster economic growth, Kerala’s fiscal stress has remained a puzzle for all these years. The article “Kerala’s Persistent Fiscal Stress: A Failure in Public Resource Mobilisation?” by Jose Sebastian (EPW, 1 June 2019) has convincingly cracked it. Among the several important findings and observations of the author, one that fascinated me is the role of “scholarly studies” in reinforcing the widely held perception that Kerala is a highly taxed state. The penchant of the political class and bureaucracy to engage in competitive populism is understandable.

In the instant case, “scholarly studies” came in quite handy for them to engage in the kind of fiscal profligacy, which is likely to land the state in a debt trap sooner or later. The duty of the academic community is to reveal the bitter truth to the society. Unfortunately, the academic community of Kerala is also divided between the United Democratic Front and the Left Democratic Front, two alternating political fronts. When “centre baiting” was fashionable, it was quite natural for some of them to ally with the political class.