Revenue arrears of Kerala stood at a whopping ₹41,188.44 crore, as on March 31, 2025, according to a report of the Comptroller and Auditor General (CAG) on State Finances for the 2024-25 fiscal tabled in the Kerala Assembly on Tuesday (June 23, 2026).

The amount included ₹12,951.77 crore, which has not been recovered for more than five years, the CAG report said citing information collected from State government departments.

The revenue arrears accounted for 44.23% of the State’s own revenue (₹93,128.81 crore) for 2024-25.

The cumulative arrears go up to ₹57,887.85 crore when the arrears in recovery of principal of loans amounting to ₹16,699.41 crore from the State public sector enterprises are also taken into account, the CAG report noted.

Breakdown of total arrears

Of the total revenue arrears, the State Goods and Services Tax (GST) accounted for ₹18,907.56 crore, followed by arrears on interest receipts at ₹8,480.25 crore. Arrears on taxes and duties on electricity stood at ₹6,831.93 crore and that on vehicle taxes, at ₹2,876.07 crore. Other arrears include police (₹599.78 crore), Forest and Wildlife (₹457.31 crore), stamps and registration fee (₹718.52 crore), mining and geology (₹648.41 crore) and land revenue (₹567.82 crore).

Another CAG report tabled in the Assembly on Tuesday, on State revenues for the period that ended in March 2024, pegged the revenue arrears as on March 31, 2024, at ₹30,308.52 crore.

The CAG report on State finances observed that “timely realisation of pending arrears is (tax and non-tax) another step towards enhancing the fiscal space.”

Inefficiencies in assessment, undervaluation and limited enforcement mechanisms of key tax streams such as State GST, stamp duty and excise will lead to subdued revenue growth, the report said. Under-realised non-tax revenues, with low user charges, poor cost recovery and suboptimal returns on public assets and investments also impede the fiscal space, it said.