The Kerala Infrastructure Investment Fund Board (KIIFB) is facing scrutiny over its financial situation, as highlighted in the White Paper on the state’s finances. The report raises concerns about the board’s debt burden, borrowing costs, and project priorities. Created to mobilize funds beyond the state’s usual borrowing limits, the KIIFB has faced challenges, with its borrowings being considered state borrowings by the Comptroller and Auditor General.
The White Paper points out that KIIFB’s borrowings have incurred higher costs compared to direct state borrowing, resulting in additional annual expenses of around Rs 420 crore. With a total obligation of nearly Rs 56,000 crore, including pending loan repayments and approved projects lacking assured funding, the board’s financial situation is under scrutiny. While the KIIFB has enhanced institutional capacity in project evaluation, the report suggests integrating these strengths into the government system.
Concerns have been raised regarding the geographical and social distribution of KIIFB-funded projects, with certain districts receiving a disproportionate share of approvals and payments. The report questions the concentration of expenditure in specific regions, noting discrepancies with human development and economic indicators. Additionally, the White Paper highlights limited focus on marginalized communities, with minimal spending for Scheduled Caste and Scheduled Tribe departments.
Chief Minister V.D. Satheesan emphasized that the White Paper aims to present the state’s fiscal position and spark discussions on the way forward. Recommendations include bringing the KIIFB fully under budgetary control and conducting a forensic audit of its operations and liabilities. The findings have reignited debates on whether the KIIFB, once hailed as a financial innovation, now poses a fiscal challenge requiring restructuring.
