CM VD Satheesan demands a forensic audit of KIIFB, calling it a ‘symbol of gross mismanagement’. Accusing it of acting as a parallel government, he highlights its exorbitant borrowings and the state’s deepening fiscal crisis.
Asserting that the Kerala Infrastructure Investment Fund Board (KIIFB) has become a “symbol of gross mismanagement,” Chief Minister VD Satheesan has demanded a comprehensive forensic audit of the body, a day after the UDF government led by him presented a ‘White Paper’ on the state’s fiscal health in the Assembly. In a post on X, Satheesan alleged that KIIFB functions as a “parallel government” beyond the framework of checks and balances, accusing it of borrowing at exorbitant rates and burdening future generations with costly debt. “KIIFB has become a symbol of gross mismanagement and lack of accountability. It borrowed at exorbitant rates, burdening future generations with costly debt, while project allocations often appeared driven by political considerations rather than objective development priorities. Functioning as a parallel government beyond the normal framework of checks and balances, KIIFB warrants a comprehensive forensic audit to ensure transparency, accountability, and prudent use of public resources,” Satheesan posted on X.
KIIFB has become a symbol of gross mismanagement and lack of accountability. It borrowed at exorbitant rates, burdening future generations with costly debt, while project allocations often appeared driven by political considerations rather than objective development priorities.… — V D Satheesan (@vdsatheesan) June 5, 2026
‘White Paper’ Exposes Deepening Fiscal Crisis
Yesterday, the Keralam Chief Minister, who also holds the post of the Finance Minister, had presented, in the Legislative Assembly, a status report on the State’s fiscal health. The document highlighted a deepening fiscal crisis in the state, pointing directly at the LDF government’s reliance on off-budget borrowings through KIIFB.
The White Paper alleged that the State’s debt has reached “alarming proportions” because KIIFB bypassed the Consolidated Fund of the State. It further claims that the high-interest rates on loans, including the controversial Masala Bonds, have created a long-term financial liability that the State’s revenue cannot sustain. “The government has turned KIIFB into an extra-constitutional body,” the White Paper noted, adding that project selection was heavily skewed toward political strongholds rather than being based on a merit-driven development agenda.
The UDF leadership argued that while the government claims to be building infrastructure, the lack of transparency in KIIFB’s accounts hides the true extent of Kerala’s bankruptcy.
Key Figures from the Report
The ‘Kerala’s Fiscal Health: A Status Report’ labelled Kerala Infrastructure Investment Fund Board (KIIFB) as a “parallel fiscal authority” that has created a Rs 56,000 crore financial obligation for the State. This includes Rs 21,000 crore in unmet loan liabilities and Rs 35,000 crore required for projects already in the pipeline.
The Status report, which was prepared by a committee chaired by former Cabinet Secretary K M Chandrasekhar, revealed that the State is grappling with a massive debt of Rs 5.07 lakh crore and inherited payment arrears totalling nearly Rs 48,733 crore.
The ‘White Paper,’ which seeks to provide a baseline for the new government’s tenure following the May 2026 Assembly elections, has recommended a forensic audit into KIIFB’s operations and a complete overhaul of its constitutional structure.
Satheesan Questions LDF’s Budget Assumptions
“The 2026-27 Interim Budget presented by the LDF Government rests on flawed assumptions. It projected ₹14,138 crore as Revenue Deficit Grants, yet the 16th Finance Commission has made no such award. As a result, Keralam faces an estimated shortfall of nearly ₹20,500 crore in central transfers this year. This massive fiscal gap poses a serious challenge to the state’s finances and raises critical questions about the credibility and sustainability of the Government’s budget projections, ” Satheesan took to X to post yesterday.
LDF, BJP Hit Back
Meanwhile, K N Balagopal, the former Finance Minister of the LDF government, has argued that the actual liabilities of the State are far lower than what was projected in the past and are well within manageable limits for a routine state administration.
The White Paper presented by the Chief Minister in the Assembly “contains some facts and some partial facts. Anyway, one thing is very clear: when he was the Opposition Leader, he always used to claim that Kerala is a state heavily burdened with borrowings. He used to say that around Rs 1.25 lakh crore was due to government employees and other state departments, and that total borrowing, excluding this, stood at Rs 6 lakh crore. However, this report states that total borrowing is only Rs 5 lakh crore–and that is calculated up to the present day, meaning it is not just up to March,” Balagopal said yesterday.
Keralam BJP president Rajeev Chandrasekhar also yesterday attacked the previous CPI(M)-led government, alleging that the State’s economy was being managed like a Ponzi scheme, further claiming that the true fiscal situation had been hidden from the public. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)