CAG flags ‘variation’ of ₹12,669 crore in Kerala’s KIIFB, KSSPL off-Budget borrowings for 2024-25
The Comptroller and Auditor General (CAG) has flagged a ‘variation’ of ₹12,669.92 crore in the off-Budget borrowings made by the Kerala Infrastructure Investment Fund Board
The Comptroller and Auditor General (CAG) has flagged a ‘variation’ of ₹12,669.92 crore in the off-Budget borrowings made by the Kerala Infrastructure Investment Fund Board (KIIFB) and the Kerala Social Security Pension Ltd (KSSPL) for the 2024-25 fiscal. The finding is part of a CAG report on State Finances for the 2024-25 fiscal tabled in the Assembly on Tuesday. At the beginning of 2024-25, the State government had reported ₹2500 crore by KSSPL and none by KIIFB to the Centre as the borrowings proposed for the fiscal.
But the actual borrowings that fiscal stood at ₹8,089.92 crore by KIIFB and ₹5,563.09 crore by KSSPL, totalling ₹13,653.01 crore. Only a borrowing of ₹983.09 crore, by KSSPL, was reported by Kerala to the Centre for 2024-25, resulting in a “variation” of ₹12,669.92 crore. The variation came to light during scrutiny of the documents furnished by the State government for securing consent for market loans during the subsequent fiscal, 2025-26. Reiterating its concerns regarding off-Budget borrowings made through these agencies, the CAG has recommended that the Kerala government disclose the details of such borrowings in the Budget as well as to the Union government.
While the CPI(M)-led LDF was in power in Kerala during the period of audit, the CAG’s observations have come at a time when the new Congress-led UDF government has announced plans to overhaul KIIFB. A White Paper tabled in the State Assembly by Chief Minister V.D. Satheesan on June 4 also supported a overhaul of KIIFB, observing that its “fundamental premise has been undermined.” “Discrepancies in reporting of off-Budget borrowings to Government of India while seeking consent for raising market borrowings is another serious transparency concern noted by the audit,” the CAG report said.
In this report too, the CAG has countered the State government’s argument that KIIFB and KSSPL borrowings are “contingent liabilities” rather than direct debt of the State. This is not acceptable since the budgetary allocations of the State are being utilised by KIIFB and KSSPL for repaying their liabilities, the CAG said, observing that these entities lack the sufficient revenue base for servicing their debt.
The BriefWire