Kerala is facing bankruptcy due to various reasons. Kerala subsidizes the health and education sectors heavily but it performs worst in all three sectors of the economy, which has led to the mounting debt and the failure to pay such debt has only increased Kerala’s dependence on the Union Government to keep the economy afloat. The wages in Kerala for labourers are one of the highest in India, causing an inflow of migrant labour into the state from North Indian states. Though the government is bankrupt, the state is driven mostly by spending from overseas. The Kerala state government’s expenditure on social welfare programmes and public services is relatively high compared to other states. If revenues do not match expenditure, it could lead to fiscal challenges. If the union government doesn’t intervene, Kerala's economy may be worse than the Sri Lankan economic crisis.
