Broaden Kerala’s tax base to tap economic potential: MA Oommen

Chief Economist MA Oommen said Keralam needs to expand its tax base, especially through Value Added Tax. He also recommended developing an access document setting the state’s priorities and goals for the next five years.

Addressing a national conference on ‘Second Generation Goods and Services Tax (GST) Reforms in India: Implications for Public Finance and Fiscal Policy’ organized by Gulati Institute of Finance and Taxation (GIFT) in Thiruvananthapuram on Tuesday (September 8, 2026), Prof. Oommen that efforts to increase the economic potential of the state of Keralam become stronger. base. Referring to the volume of goods entering the state, he said that more than 14 lakh trucks enter Kerala every month to supply goods for consumption.

He also highlighted the magnitude of remittances flowing into Keralam. Citing the Kerala Migration Survey, he said the state’s total remittances in 2023 were ₹2.17 trillion, compared to the state government’s total expenditure of ₹1.59 trillion in 2023–24.

On this occasion, congratulations were received by prof. Oommen.

Kerala State Planning Board Vice-Chairman KM Chandrasekhar, who presided over the inaugural session, said Keralam initially expected to benefit significantly from the GST as it is a destination-based tax. The removal of barriers to the movement of goods was expected to benefit traders and facilitate trade. However, the GST system has not fully stabilized even after several years, he pointed out.

According to him, technological infrastructure remains a work in progress, Integrated Goods and Services Tax (IGST) transfers to states are not always timely and there is still no satisfactory dispute resolution mechanism between states or between the Center and states. The complexity of the system has also greatly burdened traders, who are often dependent on tax advisers, he pointed out.

Tax evasion

Inaugurating the conference, Transport Minister CP John emphasized the need to improve GST collection in Kerala and strengthen mechanisms to detect tax evasion.

He said the transport department has a direct link with GST because of the large volume of goods transported across the state. He pointed out that the smooth movement of goods after the abolition of checkpoints has brought significant benefits, but also challenges in tracking goods and preventing leakages.

He called for better use of fleet and goods tracking systems to close enforcement gaps. Strengthening these systems would be among the government’s priorities for increasing tax revenues.

Additional Principal Secretary (Finance and Taxation) KR Jyothilal, International Monetary Fund (IMF) Chief Economist Arbind Modi and Director GIFT KJ Joseph spoke on the occasion.

Published – 8 Sep 2026 23:15 IST