Thiruvananthapuram, 04 June (H.S.): The Kerala government's White Paper on the state's finances has launched a sharp critique of the Kerala Infrastructure Investment Fund Board (KIIFB), one of the flagship initiatives of the previous Left Democratic Front (LDF) government, alleging that political considerations rather than the state's developmental priorities guided its functioning over the past decade.
The White Paper, tabled in the State Assembly on Thursday, claims that a disproportionate share of KIIFB's investments was concentrated in a few districts, raising questions about the equity and rationale behind project allocation.
According to the report, nearly 20 per cent of the total funds invested by KIIFB for infrastructure development were spent in Kannur district, the political stronghold of the CPI(M) and the home district of former Chief Minister Pinarayi Vijayan and several senior Communist leaders.
The report further states that Thiruvananthapuram received 17 per cent of KIIFB investments, while Ernakulam accounted for 11 per cent. Together, the three districts absorbed nearly half of KIIFB's total expenditure.
The White Paper argues that there was no justifiable basis for concentrating such a large share of investments in only three districts. It alleges that neither human development indicators nor economic requirements were adequately considered while allocating KIIFB funds, suggesting that political factors played a dominant role in determining spending priorities.
The report also highlights the financial challenges facing KIIFB. It notes that the agency currently carries a debt burden of approximately ₹21,000 crore, while an additional ₹35,000 crore will be required to complete projects that have already been undertaken. Since KIIFB's liabilities ultimately fall on the state government, the report warns that the financial implications of these commitments will continue to affect Kerala's fiscal position.
The White Paper is also critical of the decision taken in 2017 to grant then KIIFB Chief Executive Officer K.M. Abraham the powers of an ex-officio secretary in the Finance Department. According to the report, the move amounted to a violation of the government's Rules of Business and enabled an official outside the formal government structure to issue orders on behalf of the government. The report describes the arrangement as inconsistent with sound financial management practices.
While acknowledging that KIIFB was originally conceived as an innovative mechanism to accelerate infrastructure development, the report says its foundational principles were subsequently altered. It points out that KIIFB borrowings are now treated as part of the state's overall debt, while the cost of borrowing through KIIFB has been higher than direct government borrowing.
The report also notes that the Comptroller and Auditor General (CAG) had previously expressed concerns about the existing operational model of KIIFB and suggested the need for structural reforms. The White Paper states that the focus should now be on identifying and implementing those reforms.
The document was prepared by a committee comprising former Cabinet Secretary Dr. K.M. Chandrasekhar, Additional Chief Secretary (Finance) K.R. Jyothilal, Director of the Centre for Development Studies Dr. C. Veeramani, and economist Dr. Narayana.
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Hindusthan Samachar / Arun Lakshman
