States should get compensation for GST revenue loss; eco growth should benefit all: Kerala FM
Kerala Finance Minister Kn Balagopal said that on Sunday, September 14, 2025, rationalization aids should be transferred to ordinary people on Sunday, but if there is no compensation for annual loss of income, he could not continue to meet the social responsibilities of states.
For Kerala, annual income loss caused by GST ratio rationalization is estimated to be 8,000 CRORE to 10,000 Crore.
Balagopal, claiming that economic growth should be beneficial for the whole country PTI This progressive taxation should not mean less tax for everyone and high -income or high -level luxury goods should be more taxed, which is the general good taxation application.
The Council of Goods and Service Tax (GST), representing the central and states, on September 3, a two-degree GST structure-5% and 18%. Reviewed rates, which are valid from September 22, will reduce the prices of a large number of substances.
While Kerala welcomes the ratio rationalization exercise, it is about not having a compensation mechanism for loss of income.
Currently, there are 5%, 12, 18 and 28 – four -ratio plate.
In an interview with the PTI in the National Capital on Sunday, September 14, 2025, Mr. Balagopal stressed that if the rationalization of GST rationalization does not work with all guarantees for the state, the situation will be harmful for the future public financing.
“GST rationalization will result in big discounts in taxes and prices should fall in the coming days. Common consumers ‘AAM AADMI’ ni … In the past, tax difference (2017-18), tax difference is not transferred to people,” he said.
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GST, sales tax and value added tax (VAT) are among the main income sources for a state, the center has much more options, the minister emphasized that if the loss of income is not compensated, the states cannot continue their social responsibilities such as health, education and public distribution system.
According to the Kerala -based Gulati Finance and Taxation Institute, the annual income loss of the state due to its rationalization is estimated to be in the range of 8,000 CRORE to 10,000 Crore.
Balagopal, “Indian economy is growing like everything. We are all happy about this … Growth should be useful for the whole country … Those who deserve it should take it … Otherwise, Laissez-Faire economy and free market will not help the country to work,” he said.
If states weaken without anything for prosperity activities, “What is the meaning of development we boast?” The Minister asked.
On September 3, Mr. Balagopal said that the current rationalization framework to the GST Council deals with the impartiality of income at the national level, but consumption models showed great difference between states.
“For the Kerala, where the consumption basket is intensely distorted towards higher proportions, the effect will be disproportionately violent compared to the national average,” he said.
According to the Kerala government, if the state’s GST income continued to grow by about 12% of the protected income at the end of the compensation period, the income accrued to the state would be 51.892 crore in 2024-25, while the GST income would be 32,773 Crore in the same financial year.
Published – 15 September 2025 04:37
