Thiruvananthapuram, June 15: Kerala’s Chief Minister V.D. Satheesan held a discussion on a comprehensive financial roadmap presented by the state’s former Chief Auditor, Dr. Biju Jacob. The roadmap suggests that the state can boost its revenue through advanced data analytics and information system audits, rather than imposing new taxes.
Dr. Jacob presented his findings in the presence of senior officials from the finance and tax departments. This meeting comes at a critical time, as Kerala faces a public debt exceeding ₹5 lakh crore, and the Chief Minister is set to present his first budget on June 19.
The former top auditor 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 rather the inability to fully collect taxes that are legally owed to the state.
He stated, “My suggestion focuses on identifying taxpayers and tax bases that fall outside the current assessment system. This requires technology-based investigations and analyses.”
Referencing a 2014 information system audit study, he highlighted that a sample analysis revealed an additional potential tax revenue of ₹12,282 crore under KVAT, KGST, and CST, compared to the actual tax collection of ₹22,414 crore, indicating a recovery potential of nearly 55 percent of total collections.
Dr. Jacob argued that a thorough analysis of all data could reveal an even larger gap. He proposed a comprehensive technology-based information system audit that would include identifying fraudulent registrations, uncovering networks of shell companies, investigating cases of concealed business activities, discrepancies in e-way bills, inconsistencies in GST and income tax data, suspicious refund claims, and reviewing ERP audit trails.
He also mentioned significant GST scams in Kerala, including a case of ₹1,170 crore involving fraudulent registrations and input tax credit (ITC) fraud, as well as another case of tax evasion amounting to ₹580 crore.
Dr. Jacob urged 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 millions.
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