What are the reasons behind the tag of being financially unhealthy that the Centre has given to Kerala

The tag of being financially unhealthy given to Kerala by the Centre can be attributed to several factors: 1. High revenue deficit: Kerala has been experiencing a persistent revenue deficit due to a gap between revenue receipts and expenditures. This indicates that the state's revenue generation is not sufficient to meet its expenses. 2. Increasing debt burden: The state has been relying heavily on borrowings to fulfil its financial obligations, resulting in a rising debt burden. This creates a strain on the state's finances and limits its ability to invest in economic development. 3. High financial liabilities: Kerala has significant financial liabilities, including outstanding loans, interest payments, and pension liabilities. These obligations place a burden on the state's finances and limit its capacity to fund development projects. 4. Limited revenue sources: The state heavily depends on sectors like tourism and remittances from non-resident Keralites. However, the COVID-19 pandemic and global economic downturn have severely impacted these sectors, leading to reduced revenue generation. Consequences of this assessment on Kerala's economy and development may include: - Limited investment capacity: The state's financial constraints may limit its ability to invest in infrastructure, education, healthcare, and other social welfare initiatives. - Slow economic growth: The financial weaknesses could result in slower economic growth, reduced job opportunities, and hindered industrial development. - Reduced public services: A strained financial situation may lead to a cut in public expenditure, affecting the quality and availability of essential services like healthcare, education, and public infrastructure. - Credit rating downgrade: The financial unhealthy tag can result in credit rating downgrades for Kerala, making it harder and costlier for the state to borrow funds for development projects. Overall, the financial weakness of Kerala could hinder its socio-economic development and impede its efforts to address key challenges and inequalities in the state.