KOCHI: With the Union government bringing the loans availed by Kerala Infrastructure Investment Fund Board (KIIFB) under the state’s borrowing limit, the Kerala budget for 2024-25 unveiled by Finance Minister K N Balagopal on Friday outlined plans for KIIFB to go for more revenue-generating projects.
“Though a portion of KIIFB’s working capital is provided by the government as budget allocation, a major part is still raised as interest-bearing loan. In this context, the government will conduct studies and explore the possibilities of undertaking more revenue generating projects, thereby transforming KIIFB into a revenue-generating entity,” Balagopal said.
Experts pointed out that the finance minister’s budget announcement has laid the ground for the collection of user fees or toll for KIIFB-funded roads. However, other KIIFB-funded projects such as schools and hospitals will not come under the revenue-generating model, they said.
“We need to understand that KIIFB has made huge investments in many sectors. We need to service the debt. We are investing in roads, making our schools more hi-tech, and bringing better facilities to our hospitals. Naturally, we need to provide more funds to KIIFB. The move to make KIIFB a revenue-generating entity is to ensure that it gets sufficient funds,” said Dr K Ravi Raman, an expert member of the Kerala State Planning Board.
Gopakumar Mukundan, an adjunct faculty at the Centre for Socio-economic and Environmental Studies (CSES), pointed out that around 28% of KIIFB-funded projects including K-Fon, IT parks, and industrial parks are revenue-generating.
“We estimate that KIIFB may have earned at least Rs 1,500 crore through these projects,” he said.
Presenting the budget, Balagopal pointed out that the assessment at the time of KIIFB’s constitution was that the infrastructure funding body should undertake revenue-generating projects. “The Union government has taken the approach of torpedoing the KIIFB experiment. The burden of the KIIFB-funded development projects, which was ideally supposed to be undertaken by availing loans outside the budget, is now being borne from the state budget,” the finance minister said.
KIIFB funding for projects
First Pinarayi govt (2016-17 to 2020-21) C10,500 crore
Second Pinarayi govt (3 years) C22,298 crore
1,147 projects worth J87,436.7 crore approved by KIIFB till December 31, 2024