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Kerala Committee Reports IGST Settlement Shortfall: ₹550B Exports vs ₹1.5T Imports Yields 1.2% Ratio

Target:UPSC GS-IIIMPSCPrelims HighMains MediumStatic GK Link
09 Feb 2026
~2 min
Source: The Hindu
Key Data:₹550 billion₹1.5 trillion₹1 trillion1.2%2017-182023-24
Bodies:Kerala Public Expenditure Review Committee (KPERC)GST Council
Practice MCQs from today's news ▸
What This Article Covers

1.The 7th Kerala Public Expenditure Review Committee (KPERC) report for 2021-24 identifies a systemic shortfall in IGST revenue for the state, calling it a 'major concern'.

2.Kerala has a massive trade deficit (~₹1 lakh crore) with other states, but its IGST-to-SGST ratio is only 1.2%, far below the expected minimum of 3, pointing to flawed settlement rules.

3.For exam-takers, this news tests understanding of GST architecture, centre-state financial relations, and the role of bodies like the GST Council in resolving inter-state disputes.

The Big Picture
Prelims · HighMains · Medium

Kerala's Public Expenditure Review Committee has flagged a persistent and puzzling shortfall in its share of Integrated GST (IGST) settlements, despite being a consumption-heavy state. This indicates a structural flaw in the GST compensation mechanism, affecting state revenues and highlighting issues in federal fiscal transfers that are crucial for UPSC Economy and Polity sections.

Exam Lens

Quick Exam Facts From News

Committee & Report7th Kerala Public Expenditure Review Committee (KPERC), 1st report (2021-22 to 2023-24)
Kerala's Trade DeficitApproximately ₹1 lakh crore (₹1 trillion)
IGST/SGST Ratio (2023-24)1.2%
SGST Collection (2023-24)₹13,934 crore
IGST Collection (2023-24)₹16,977 crore

1-Minute Revision

  • ›Committee & Report: 7th Kerala Public Expenditure Review Committee (KPERC), 1st report (2021-22 to 2023-24)
  • ›Kerala's Trade Deficit: Approximately ₹1 lakh crore (₹1 trillion)
  • ›Target this Data: IGST/SGST ratio for Kerala (1.2% in 2023-24) and the trade deficit (~₹1 lakh crore).
  • ›Target this Nodal Body: The Kerala Public Expenditure Review Committee (KPERC) and the constitutional body - GST Council (Article 279A).
  • ›Target this Legal Point: The Integrated Goods and Services Tax (IGST) Act, 2017, which governs inter-state transactions.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

The issue of IGST settlement shortfall for Kerala, as highlighted in the news, falls under the primary purview of which constitutional body for resolution?

Q2Statement-basedHard

Consider the following statements regarding the findings of the Kerala Public Expenditure Review Committee (KPERC) report:

1. It stated that the buoyancy of GST revenues has decreased in the post-COVID recovery phase.

2. It described Kerala's low IGST share as a 'structural rather than transitory' problem.

3. It noted that Kerala's IGST-to-SGST ratio is significantly lower than expected given its trade deficit.

Q3Data-centricMedium

As per the 7th KPERC report cited in the news, what was the approximate trade deficit of Kerala with the rest of the country?

Q4Application/ImpactMedium

What is the primary implication of Kerala's persistently low IGST share, as identified by the KPERC?

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