Kerala's new UDF government proposes measures to improve tax collection, planning and project implementation

Amid heated political debate over Kerala’s fiscal health, the new Congress-led United Democratic Front (UDF) state government has outlined some measures, including revamping the Goods and Services Tax (GST) department, to improve tax collection, planning process and overall fiscal position.

The proposals are part of the Vision 2031 plan approved by the state government. Although the previous Left Democratic Front (LDF) government restructured the GST department, the UDF, then in opposition, termed it sloppy, delayed and ineffective.

The government will take steps to resolve the tangled issue of Integrated GST (IGST), according to the proposals. It may be recalled that in 2024, the 6th Kerala Public Expenditure Scrutiny Committee emphasized the need for Kerala to pay close attention to the IGST mechanism and noted that the current system was causing revenue loss to the state. The panel estimated the gross loss in IGST from July 1, 2017 to ₹ 20,000-25,000 crore based on certain assumptions regarding value addition within Kerala and the return filing behavior of traders.

Intelligence and audit wings will be strengthened

Steps will be taken to strengthen the GST intelligence and audit wings and increase GST registration in line with the government’s proposals formalized through the May 22 order issued by the Program Implementation, Evaluation and Monitoring Department. The audit department will be strengthened and more public sector undertakings will come under its purview, it said.

In the area of planning and economic affairs, the new government proposes to “strengthen” the Kerala State Planning Board. The government proposes to establish a quasi-judicial body to resolve project disputes. The Chief Minister will chair a panel to review the projects and ensure timely implementation. The government is also seeking to introduce greater transparency in the mobilization of financial resources for major projects. Regarding the budget, the government plans to publish annual budget performance evaluation reports twice a year. According to the document, measures will also be taken to prevent unnecessary expenses.

Amid verbal spats between the UDF-LDF over the state of the exchequer, Chief Minister VD Satheesan, who handles the finance portfolio, announced plans to release a White Paper on the state’s fiscal health. The government has also constituted a panel headed by former union cabinet secretary KM Chandrasekhar for this purpose. The UDF government’s Vision 2031 has 1,291 items across departments, including five ‘Indira Guarantees’ and five dream projects.

Published – 24 May 2026 18:39 IST