The Pravasi view: remittances and the tax base

Remittances from Keralites abroad are huge — on the order of 23% of the state's net domestic product. They lift household incomes, savings, and spending across the state. But remittances are **income earned outside Kerala**. The state cannot tax that income directly; it only sees the slice that turns into local consumption (and the GST and stamp duty that consumption generates). So a large remittance economy does not translate into a proportionally large tax base. **Why this matters to you:** Kerala can be prosperous at the household level and still have a state government that is short of revenue. The two measure different things — household income versus what the state can tax.