Kerala economy records ‘strong’ 6.19% real growth in 2024-25, says Economic Review

The Economic Review 2025, presented in the State Legislative Assembly on Wednesday, January 28, 2026, stated that the Kerala economy recorded “strong growth” in 2024-25, with the Gross Domestic Product (GSDP) registering 6.19% growth in real terms.

At current prices (not adjusted for inflation) GNP grew by 9.97%. The state’s Gross State Value Added (GSVA) ​​- the total value of goods and services produced in the economy – increased to 6.59% in 2024-25 compared to 6.34% in 2023-24. The Economic Review observed that “the realization of Kerala’s development goals and economic recovery path will depend significantly on cooperative relations with the Union government and prudent management of available resources.”

The document prepared by the State Planning Board was presented to the Parliament on Thursday, January 29, before the 2026-27 State Budget was tabled.

Sectors are growing

The “diffusion of proactive policy interventions” strengthened growth among sectors dominated by the services sector, the document said. “GDP growth across sectors reveals strong positive growth in 2024-25 as well as in 2023-24. The primary sector recorded a strong growth of 2.36% in real terms in 2024-25 compared to 0.24% recorded in 2023-24. The secondary sector grew 7.87% in real terms compared to 9.74% in 2024-25. “2023-24,” he said.

Within the primary sector, agriculture and allied activities increased by 2.14% compared to 1.25% in 2023-24. Fisheries and aquaculture increased by 10.55% compared to negative growth in 2023-24. The secondary sector (industry and manufacturing) grew by 7.87%. In the secondary sector, construction and manufacturing recorded growth of 8.12% and 7.42%, respectively, in real terms during 2024-25. The Economic Review said sectors including information technology, tourism, hotels and restaurants, communications, trade and transport (excluding road transport) recorded “positive growth”.

Debt-GDP ratio was 24.83%

Kerala’s outstanding public debt at the end of 2024-25 stood at ₹3,10,015.86 crore. The annual growth rate of public debt increased from 12.60% in 2023-24 to 15.68% in 2024-25. Debt-to-GDP ratio increased to 24.83% in 2024-25 compared to 23.60% in 2023-24.

Revenue receipts, own tax revenues increased

After the decline in the previous fiscal, Kerala’s total revenue receipts registered an increase of 0.3% in 2024-25, even as the downward trend in Central transfers continued. Central transfers fell by 6.15% in 2024-25 compared to 2023-24, which the document described as a “sharp decline”. Revenue receipts increased from ₹ 1,24,486 crore in 2023-24 to ₹ 1,24,861.07 crore in 2024-25. In 2024-25, State Own Tax Revenue (SOTR) increased to 61.38% of the total revenue of the State. In 2015-16, SOTR’s share was 56.49%. In 2024-25, SOTR stood at ₹76,642.20 crore.

Lottery revenue increased

The lottery continues to play a significant role in the State’s own non-tax revenue (SONTR); The proceeds from the lottery account for ₹12,711.18 crore of the ₹16,486.62 earned as non-tax income. Lottery revenue increased by 1.44%.

On the expenditure side, the total expenditure registered a growth of 9% in 2024-25 compared to 0.5% in 2023-24. Revenue expenditure increased by 9.3% compared to 0.5% in 2023-24. Total capital expenditure increased by 8.96% in 2024-25 compared to 0.48% in 2023-24.

The Economic Review noted that the fiscal deficit as a percentage of GDP has risen marginally to 3.86% in 2024-25 and is forecast to be 3.16% in 2025-26. The revenue gap stands at 2.49% of GDP, compared to 1.6% in 2023-24. The revenue gap is expected to fall to 1.9% in 2025-26. “Kerala is pursuing prudent fiscal consolidation through revenue growth and rationalization of expenditure,” the document said.