Once hailed for its strong social indices and welfare-driven governance, Kerala is now facing a financial crisis. With debt levels soaring and over 75% of state revenues being spent on salaries and pensions, the model that sustained the state for decades is under immense strain. Tightening borrowing limits have further exacerbated the situation, raising concerns about the sustainability of Kerala’s welfare economy.
As Karl Marx famously noted, “The only part of the so-called national wealth that actually enters into the collective possession of modern peoples is their national debt.” This sentiment rings true as Kerala grapples with mounting financial challenges, leaving many wondering: can the state’s economic framework withstand the pressure, or is a collapse imminent?
