ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Kerala s Fiscal Crisis A Diagnosis

K K George Kerala's fiscal crisis and its economic crisis are reinforcing each other Due to paucity of funds, there has been deceleration in the state's plan expenditure in recent years. This along with other exogenous factors have con- tributed to a slow expansion of the state's resource base. As a result, the own resources of the state are inadequate, despite larger resource mobilisation efforts, to meet even its current non-plan commitments. The absence of any surplus on non-plan account has led to the reduction in size of the state's plans, given the present formula for determining state's plan outlays. A major policy change is called for to get Kerala, as well as other backward states, out of this vicious circle of small volume of resources, small plan outlays and small resource base.

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