THIRUVANANTHAPURAM: A committee set up by the state government to review the Kerala Infrastructure Investment Fund Board (KIIFB) has recommended that the Board should stop borrowing from the market or fund projects.
The panel also recommended a CAG audit of KIIFB and cancelling the order that sends motor vehicle tax and petroleum cess directly to the Board.
The committee said KIIFB’s main purpose, raising money without using the state’s borrowing limit, no longer exists. The Centre now counts KIIFB loans as the state’s own borrowing. The centre had already cut Rs 25,932.55 crore from the state government's borrowing space on this account. KIIFB also paid more interest than the state's interest payment on its own loans.
According to the report, the state lost Rs 61,678.46 crore in receipts because of the KIIFB model. However, the Board has spent or holds only Rs 48,574.82 crore. The committee pegged avoidable costs at Rs 1250 crore, including higher interest and the Masala Bond.
According to the report, projects meant to earn revenue failed to do so. Only three of 44 such projects labelled as revenue earning projects repay loans from their own income. State government transfers met 99.4 per cent of KIIFB’s debt repayment.
