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Kerala government's own-tax revenue share compared to the all-states average

ALower than average

BHigher than average

CEqual to average

DNegligible

Answer:

B. Higher than average

Read Explanation:

The most accurate comparison for Kerala's government Own-Tax Revenue as a percentage of its Gross State Domestic Product (GSDP) is that it is typically Higher than average when compared to the all-states average, though sometimes the difference is marginal or the ratio is described as "on par" depending on the specific time period and data source used.

  • Own-Tax Revenue to GSDP Ratio: Kerala has historically maintained a relatively higher Own-Tax Revenue as a percentage of its GSDP compared to the all-India average for states. This is often attributed to the state's high per capita income and high consumption-driven economy, which provides a strong base for sales tax/GST and other state taxes.

  • The Paradoxical Nature: Despite the higher ratio, Kerala still faces significant fiscal stress (high revenue deficit and debt). This is because its expenditures (particularly on committed items like salaries, pensions, and interest payments, and social sector spending) are also substantially high, and the tax effort, though above average, is often considered inadequate relative to its very high social development and expenditure needs.


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