E-Paper
Kerala recorded positive growth across sectors in FY25: Economic Review
Kerala's GSDP grew by 9.97% in 2024-25, positioning it among the top states, despite rising fiscal deficits and declining Union grants.
Kerala’s Gross State Domestic Product (GSDP) at current price grew at 9.97% in 2024-25 as against 9.3% in the previous fiscal, helping the state position itself among the top ten states in the country with high per-capital GSDP, the state’s Economic Review (ER) tabled in the Assembly on Wednesday noted.
Kerala grew at 6.19% in 2024-25 compared to 6.73% in 2023-24, the report said.
The tabling of the ER comes on the eve of the last budget of the current Left Democratic Front (LDF) government as the state heads towards elections in summer. Finance minister KN Balagopal, who has had a challenging task on his hands over the last five years in a post-COVID period and amid tussles with the Union government over getting the state’s rightful dues, has promised a “realistic” and “practical” budget in an election year.
The ER, prepared by the state planning board, claimed that investments have increased in productive sectors, building high-quality infrastructure, income-generating services such as tourism and IT and small and medium enterprises.
The services sector, the backbone of the state’s economy, continues to dominate the GSDP, although the primary and secondary sectors posted “robust growth”, the report said. “The spillovers of proactive policy interventions have strengthened the growth across sectors,” it said.
At the same time, the fiscal deficit as a percentage of GSDP was 3.02% in 2023-24, rose to 3.86% in 2024-25 and is estimated to be 3.16% in 2025-26. The revenue deficit has also risen, from 1.6% in 2023-24 to 2.49% in 2024-25 as a percent of GSDP. In 2025-26, it is estimated as 1.9%.
The ER underlined that the State’s total revenue receipts increased from ₹1,24,286 crore in 2023-24 to ₹1,24,861 crore in 2024-25, a marginal growth of 0.3%. However, transfers from the Union government declined by 6.15% in the last FY compared to the previous FY.
The report highlighted that 117,000 new enterprises were started in 2024-25, generating investments of around ₹7,700 crore and creating jobs for 249,000 people. Women headed one-third of the new enterprises, it said.
The public debt to GSDP ratio was 24.83% in 2024-25. The debt to GSDP ratio, which increased to 38.47% in the pandemic year 2020-21 has steadily declined and stood at 34.87% in 2024-25, it said.
“The major challenge faced by the State during the FY was a sharp decline in grants-in-aid from the Union government which fell by ₹5108.39 crore (42.33%). To sustain Kerala’s unique development model, the State must continue to maintain a strong resource base while ensuring the judicious allocation of resources. This is essential not only to uphold its welfare commitments but also to invest in critical physical infrastructure,” the report said.
