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

The Kerala economy posted “strong growth” in 2024-25 with the Gross State Domestic Product (GSDP) clocking 6.19% growth in real terms (adjusted for inflation), the Economic Review 2025 tabled in the State Legislative Assembly on Wednesday (January 28, 2026) noted, while highlighting the need for “resilient, innovative and forward-looking financial strategies” to tackle prevailing fiscal challenges.

At current prices (unadjusted for inflation), the GSDP clocked a growth of 9.97%. The State’s Gross State Value Added (GSVA) – the total value of goods and services produced in the economy – rose to 6.59% in 2024-25 as against 6.34% in 2023-24. The Economic Review observed that the “realisation of Kerala’s developmental aspirations and its path to economic recovery will significantly hinge on collaborative engagement with the Union government and the prudent management of available resources.”

Prepared by the State Planning Board, the document was tabled in the House ahead of the tabling of the 2026-27 State Budget on Thursday (January 29).

Sectors show growth

“Spillovers of proactive policy interventions” have strengthened growth across sectors, which continue to be dominated by the services sector, the document said. “The growth of GSDP across sectors reveals strong positive growth in 2024-25, the same as in 2023-24. The primary sector posted a robust growth of 2.36% in 2024-25 in real terms as against 0.24% recorded in 2023-24. The secondary sector grew at 7.87% in 2024-25 in real terms, as against 9.74% in 2023-24,” it said.

Within the primary sector, agriculture and allied activities grew at 2.14% compared to 1.25% in 2023-24. Fishing and aquaculture grew at 10.55%, compared to a negative growth in 2023-24. The secondary sector – industry and manufacturing – grew at 7.87%. Within the secondary sector, construction and manufacturing grew at 8.12% and 7.42% growth in real terms, respectively, in 2024-25. Sectors, including information technology, tourism, hotels and restaurants, communication, trade, and transport (except road transport), registered a “positive growth,” the Economic Review said.

Debt-GSDP ratio at 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 to 15.68% in 2024-25 from 12.60% in 2023-24. The debt-GSDP ratio rose to 24.83% in 2024-25 compared to 23.60% in 2023-24.

Revenue receipts, own tax revenue up

After a decline in the previous fiscal, Kerala’s total revenue receipts clocked a 0.3% increase in 2024-25, even as the declining trend in Central transfers persisted. Central transfers fell by 6.15% in 2024-25 over 2023-24, which the document has described as a “sharp decline.” Revenue receipts rose from ₹1,24,486 crore in 2023-24 to ₹ 1,24,861.07 crore in 2024-25. In 2024-25, the State’s Own Tax Revenue (SOTR) increased to 61.38% of the State’s total revenue. In 2015-16, SOTR had accounted for 56.49%. In 2024-25, SOTR stood at ₹76,642.20 crore.

Lottery revenue up

Lottery continues to play a major role in the State’s own non-tax revenue (SONTR), with receipts from lottery accounting for ₹12,711.18 crore of the ₹16,486.62 earned as non-tax revenue. Lottery revenue grew at 1.44%.

On the spending side, the total expenditure clocked 9% growth in 2024-25 as against 0.5% in 2023-24. Revenue expenditure grew at 9.3% as against 0.5% in 2023-24. The total capital expenditure increased by 8.96% in 2024-25 compared to 0.48% in 2023-24.

Fiscal deficit as a percentage of the GSDP marginally increased to 3.86% in 2024-25, and is estimated to be 3.16% in 2025-26, the Economic Review said. Revenue deficit stands at 2.49% of GSDP compared to 1.6% in 2023-24. Revenue deficit is projected to dip to 1.9% in 2025-26. “Kerala has been following a prudent fiscal consolidation through revenue augmentation and expenditure rationalisation,” the document noted.