Kerala Chief Minister V D Satheesan on Thursday launched a sharp attack on the previous LDF government, alleging that it had left behind substantial financial liabilities, including borrowings by the Kerala Infrastructure Investment Fund Board (KIIFB), which he claimed amounted to around Rs 5.07 lakh crore.
Speaking in the Assembly during the discussion on the motion of thanks to the Governor’s policy address, Satheesan also dismissed reports that nearly Rs 6,000 crore had been left in the state treasury at the time of the change of government, calling them misleading narratives circulated to influence public opinion.
He questioned why, if such funds were indeed available, they had not been used to clear pending obligations such as approximately Rs 2,000 crore in arrears owed to SupplyCo, instalments due to local self-government institutions, and outstanding dearness allowance (DA) and dearness relief (DR) payments for government employees and pensioners.
“Why were these liabilities not cleared using the alleged surplus in the treasury? Instead, a narrative was created and spread on social media claiming Rs 6,000 crore was available,” he said, adding that the state’s financial position required urgent correction.
Turning his criticism to KIIFB, Satheesan said the agency had accumulated significant liabilities and was now placing a heavy burden on the state exchequer. He alleged that while KIIFB was initially projected as an independent funding mechanism for infrastructure development, its borrowings—backed by sovereign guarantees—had effectively become part of the state’s borrowing limits.
He further said that despite earlier assurances that KIIFB loans would not impact state finances, substantial cess collections had been routed to the body, which in turn borrowed heavily at high interest rates. “Ultimately, these liabilities have been passed on to the state,” he said.
According to the white paper tabled by the Chief Minister, KIIFB currently carries loan liabilities of around Rs 21,000 crore, with additional projects worth approximately Rs 35,000 crore yet to be financed, bringing the total obligation to about Rs 56,000 crore.
Satheesan also described KIIFB as having evolved into a “parallel system” operating outside the Finance Department’s oversight, arguing that it had strayed from its original mandate of accelerating infrastructure development.
He said he had earlier suggested that at least half of KIIFB-funded projects should generate revenue, but the recommendation was not implemented.
Responding to Leader of the Opposition Pinarayi Vijayan’s remarks questioning the credibility of the white paper, Satheesan said extensive fact-checking had been carried out before its presentation.
The Chief Minister also criticised the previous government’s policy record, arguing that several social and economic indicators in the state had stagnated and required comprehensive reform. He added that the policy address outlined the government’s future direction and would be further refined in the upcoming budget discussions.
(With inputs from PTI)