A few days before the announcement of the Kerala Assembly election, Chief Minister Pinarayi Vijayan inaugurated a Rs 100-crore bridge over a 1.5-kilometre backwater stretch in Alappuzha district with much fanfare.
Vijayan's party, the Communist Party of India (Marxist), went on a social media overdrive hailing the government for fulfilling the long-pending demand of the residents of Perumbalam island in Aroor assembly constituency. The bridge construction is expected to benefit incumbent CPI(M) legislator Daleema Jojo as she takes on Congress opponent Shanimol Usman in the upcoming assembly election.
It's not just her. All the incumbent legislators in the state, cutting across political parties, appear to be harping on such projects completed with funding from the Kerala Infrastructure Investment Fund Board, better known as KIIFB.
Set up by the Left Democratic Front government in 1999, KIIFB is a special purpose vehicle (SPV) to mobilise funds for infrastructure projects through borrowings. Legislators from all political parties appear to have benefited from it.
Sample these. KIFFB has constructed school buildings in Indian Union Muslim League leader MK Ashraf's Manjeswar constituency and an indoor stadium in Vadakara, which elected CPI(M)'s political and ideological rival KK Rema of the Revolutionary Marxist Party (RMP). The fund has also been utilised to set up a dialysis centre in Opposition Leader VD Satheesan's North Paravoor constituency, construct a resting place for Sabarimala pilgrims at Kazhakkottam and upgrade a hill highway from Kallikkadu to the Kerala border village of Parassala.
KIIFB funds are mainly used for constructing roads, bridges, waterways, school and hospital buildings across the state.
Until December 31, 2025, KIIFB undertook 1,219 projects worth Rs 99,676 crore. Of this, Rs 39,375 crore has been spent on 527 projects of the state Public Works Department, while the Water Resources Department spent Rs 7,207 crore on 104 projects.
KIIFB undertook 106 projects for Health & Family Welfare Department at a cost of Rs 6,854 crore, 18 projects for Power department worth Rs 5,200 crore, 158 projects for General Education Department worth Rs 3,229 crore and 70 projects for Higher Education Department at a cost of Rs 2,343 crore.
Though the Congress has been critical of the KIIFB, its legislators too have been relying on the fund for infra development projects in their constituencies.
'KIIFB to overcome anti-incumbency'
CPI(M) leader Thomas Isaac, who gave KIIFB a makeover while serving as the finance minister from 2016 to 2021, says the fund is non-partisan and all legislators in the state have been benefiting from it.
"Kerala has witnessed a huge infrastructure development drive in the last 10 years all thanks to KIIFB. This will definitely help all incumbent MLAs to overcome anti-incumbency in the upcoming elections," he told The New Indian Express.
He said KIIFB follows a very transparent process in project selection. "Political considerations will never come into play while selecting the projects. It is totally non-partisan. Thus KIIFB drives infrastructure development in all constituencies," he said.
'Reducing financial elbow room'
Academic KT Ram Mohan, former dean and faculty of Social Sciences at the Mahatma Gandhi University at Kottayam, though, isn't impressed. He says KIIFB actually reduces the state's financial elbow room.
"Currently, 50 percent of the motor vehicle tax and Re 1 from the fuel surcharge go to the KIIFB fund. The state has to depend on the remaining amount for other expenditures. It reduces the state's financial elbow room," he said.
Ram Mohan says KIIFB torpedoes the very idea of decentralisation because the projects are not approved by the local bodies.
"Here the KIIFB board decides the projects based on legislators' proposals. Local bodies do not have any role in it. It scuttles the very idea of decentralisation," he says, and adds that KIIFB lacks public accountability and transparency.
However, Isaac counters this saying the proposals are presented in the state budget and implemented with prior approval.
"It does not torpedo decentralisation. There is no other fund that is more closely monitored than the KIIFB. It is audited by the Comptroller and Auditor General of India and competent external auditors. There is no room for corruption here," he said.
However, KIIFB faced corruption allegations from the opposition and government agencies.
In 2021, the Comptroller and Auditor General of India (CAG) had stated that off-budget borrowings of KIIFB are not in accordance with the Constitution.
In 2025, the Enforcement Directorate issued a show cause notice to Chief Minister Pinarayi Vijayan and KIIFB CEO K M Abraham in connection with the use of masala bonds for acquisition of land for infrastructure projects. The Kerala High Court has stayed the proceedings based on the notice till April 6.
Isaac defends KIIFB saying it has given Kerala the best way to overcome the infrastructure deficit.
"The key question here is whether you borrow now, build infrastructure and repay the loan in 20 years. It will not put the government in a debt trap. Opposition legislators are demanding more KIIFB funds because they are seeing tangible results," he said.
But Ram Mohan offers a different view. He says MLAs do not have any option but to avail funds.
"They are forced to fall in line. Otherwise, they will feel left out and eventually face people's ire in the next election. Because the government completely depends on KIIFB for infrastructure development," he says.
The battle may not be resolved for now. But the MLAs would be hoping that at least their fates are.