KIIFB: debt-financed expenditure offering a lifeline during a difficult financial period

What is the KIIFB and what role does it play? Why has the CAG raised concerns about it and what has been the Kerala Government’s response?

The Finance Minister of Kerala, K.N. Balagopal, had strongly objected to observations in a recent audit report by the Comptroller and Auditor General (CAG) for 2020 (the State Finance Report that was tabled in the Assembly on November 11 on the Kerala Infrastructure Investment Fund Board (KIIFB)’s “off-Budget borrowings”. The CAG asked the Government to disclose details of off-budget borrowings made through the KIIFB and Kerala Social Security Pension Ltd (KSSPL) in the budget and accounts. Mr. Balagopal said the CAG had merely echoed the findings in the previous audit report and that the Assembly had rejected the findings.

Kerala Infrastructure Investment Fund Board (KIIFB) is a body corporate constituted by the Government of Kerala to mobilise financial resources for infrastructure development of the State. It was established on November 11, 1999 through legislation -- Kerala Infrastructure Investment Fund Act 1999 -- passed by the Kerala State Assembly. In 2016, the then newly elected Left Front Government decided to considerably expand the scope of KIIFB’s operations, and to use this institution to speed up infrastructure building and economic growth in Kerala.