Pinarayi Vijayan releases ‘White Paper of Facts’, rejects UDF claims on Kerala’s Rs 5.07 lakh crore debt

The document comes over a month after the UDF government tabled the White Paper on Kerala’s finances in the state Assembly. The government’s report painted a grim picture of the state’s fiscal health, pointing to mounting public debt, pending liabilities and persistent treasury stress.

Vijayan, however, rejected the government’s assessment and said the LDF’s document was intended to place the facts before the people.

“The UDF government has stuffed its White Paper with factually incorrect statements. We released the White Paper of Facts to expose these before the people,” he told ANI.

‘Debt burden actually came down’

The trigger behind Vijayan’s response is the UDF government’s claim that Kerala’s debt and liabilities rose sharply during the LDF’s 10 years in power.

Vijayan disputed this, arguing that the state’s debt burden had actually declined during the LDF government’s tenure. He also accused the new government of concealing figures to create the impression that Kerala’s debt had crossed Rs 5 lakh crore because of the previous administration.

“The claim that the state’s total liabilities increased uncontrollably during the ten years of the LDF government is false. During the LDF’s tenure, the debt burden actually came down. By concealing the actual figures, the present state government is propagating that the state’s debt is more than Rs 5 lakh crore. The campaign that Kerala witnessed extravagance is also false,” he said.

Vijayan targets Centre over Kerala’s financial stress

Vijayan also linked Kerala’s financial difficulties to the policies of the BJP-led central government, accusing the new state government of attempting to justify the financial restrictions imposed on Kerala.

“The state government is attempting to justify the blockade-like financial policies imposed on the state by the BJP-led central government. The disruption of the programmes that had already been announced clearly indicates that there will be a breach of promises,” Vijayan said.

What the UDF government’s White Paper said

The newly elected UDF government had tabled its White Paper on Kerala’s finances in the state Assembly, saying it had inherited a severe financial crisis marked by mounting debt, rising liabilities and persistent pressure on the treasury.

According to the report, Kerala’s total public debt has reached Rs 5.07 lakh crore. The government also said it had inherited pending liabilities of Rs 48,733 crore, including dearness allowance (DA) and dearness relief (DR) arrears payable to government employees and pensioners.

The White Paper said nearly 77% of the state’s revenue is being spent on committed expenditure such as salaries, pensions and interest payments. This, according to the government, leaves limited fiscal space for development spending.

Low capital spending adds to concerns

The UDF government’s report also raised concerns about Kerala’s capital expenditure, which it said remains among the lowest in the country despite the state running one of the highest fiscal deficits.

According to the White Paper, Kerala’s capital expenditure stands at just 1.3% of its Gross State Domestic Product (GSDP). The low level of capital spending has raised concerns about the state’s ability to invest in infrastructure and support long-term economic growth.

Treasury remained under severe stress

The report also highlighted persistent pressure on Kerala’s treasury. It said the state relied on Ways and Means Advances for 262 days in 2025 and remained in overdraft for 84 days during the year.

The two competing White Papers now present sharply different versions of Kerala’s financial position. While the UDF government says it inherited a state struggling with high debt, large unpaid liabilities and limited room for development spending, Vijayan and the LDF maintain that the previous government had reduced the debt burden and that the new administration is presenting a misleading picture of the state’s finances.