Expand Keralam’s tax base to tap economic potential: M.A. Oommen
Economist M.A. Oommen has urged the Kerala government to broaden its tax base to better leverage the state's economic potential, citing high consumption and significant remittance inflows. Meanwhile, state officials expressed concerns that the GST system remains complex and inefficient, hindering the expected benefits for state finances.
Why it matters
The discussion highlights the ongoing fiscal challenges states face under India's GST regime and the need for structural tax reforms to support regional economic development.
Senior economist M.A. Oommen has said that Keralam needs to expand its tax base, particularly through value-added taxation. He also recommended the preparation of an approach paper setting out the State’s priorities and objectives for the next five years.
Speaking at a national conference on ‘Second Generation Reforms in Goods and Services Tax (GST) in India: Implications for State Finances and Fiscal Policy’ organised by the Gulati Institute of Finance and Taxation (GIFT) in Thiruvananthapuram on Tuesday (September 8, 2026), Prof. Oommen said Keralam’s economic potential had to be matched by a stronger effort to enhance the State’s tax base. Referring to the scale of goods entering the State, he said more than 14 lakh trucks arrive in Keralam every month to deliver goods for consumption.
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