Thiruvananthapuram, June 15: Kerala Chief Minister V.D. Satheesan held discussions on a comprehensive financial roadmap presented by former Principal Accountant General Dr. Biju Jacob. The roadmap suggests that the state can enhance its revenue through advanced data analytics and information system audits instead of imposing new taxes.
Dr. Jacob presented this plan in the presence of senior officials from the finance and tax departments. The meeting comes at a time when Kerala is grappling with over ₹5 lakh crore in public debt, and the Chief Minister is set to present his first budget on June 19.
The former top audit officer noted that the Chief Minister listened attentively and demonstrated a deep understanding of the issues at hand. Dr. Jacob emphasized that Kerala’s biggest challenge is not the lack of new revenue sources but the inability to fully collect taxes that the state is legally entitled to.
He stated, “My suggestion focuses on identifying taxpayers and tax bases that fall outside the current assessment system. This requires technology-based scrutiny and analysis.” He referenced a 2014 information system audit study, which identified an additional potential tax revenue of ₹12,282 crore against an actual tax collection of ₹22,414 crore under KVAT, KGST, and CST, amounting to nearly 55% of total collections.
Dr. Jacob argued that if comprehensive data analysis were conducted, the gap could be even larger. He proposed a thorough technology-based information system audit that would include identifying fake registrations, uncovering networks of shell companies, investigating cases of concealed business, discrepancies in e-way bills, inconsistencies in GST and income tax data, suspicious refund claims, and reviewing ERP audit trails.
He also highlighted significant GST scams in Kerala, including a case of ₹1,170 crore involving fake registrations and input tax credit (ITC) fraud, as well as another case of tax evasion amounting to ₹580 crore.
Dr. Jacob advised the Chief Minister that a joint audit team comprising tax officials, experts from the Comptroller and Auditor General (CAG), and chartered accountants could complete such an audit within a few months, identifying recoverable amounts worth crores.
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