The Covid-19 pandemic brought India’s economy to a grinding halt, and, although the centre was overstretched financially, so were the states, with many reeling under increasing debt. The matter again picked up heat, when Finance Minister of Kerala KN Balagopal wrote a letter to Union Finance Minister, Nirmala Sitharaman to not count the liabilities of the state government, like statutory bodies and companies, as the state debt. Balagopal highlighted the precarious financial situation Kerala is in. He added in the letter that “the financial health of the state has been seriously affected by a reduction in the revenue deficit grant to the tune of around Rs 7,000 crore this year and loss due to stoppage of GST compensation of around Rs 12,000 crore.”