The Kerala cabinet has approved an expert committee report recommending a comprehensive reorganisation of the Kerala Infrastructure Investment Fund Board (KIIFB), with the document scheduled to be tabled in the state assembly on Thursday. The decision comes as KIIFB faces existing loan liabilities estimated at around Rs 21,000 crore and pending projects requiring more than Rs 35,000 crore in financial assistance.
The report was prepared by a five-member panel headed by former Union home secretary Sudha Pillai. The cabinet approved the recommendations on Wednesday, according to a report by the Times of India. The committee had been asked to assess KIIFB’s functioning and financial position amid concerns over the institution’s borrowing and project-financing model.
The panel included former Federal Bank managing director and chief executive officer Shyam Srinivasan, former Institute of Chartered Accountants of India chairperson Nilesh Vikamsey, former Indian Audit and Accounts Service officer H Subbalakshmi, and former Union revenue secretary Tarun Bajaj. The report’s recommendations are expected to become available for legislative scrutiny when it is placed before the assembly.
KIIFB was created as Kerala’s principal mechanism for financing large infrastructure projects outside the state’s conventional budgetary allocation process. Its proposed reorganisation follows the financial concerns outlined in a white paper on the state’s finances released after the government assumed office. The white paper had raised questions about KIIFB’s functioning, fund utilisation and the scale of its borrowing.
The government document also criticised what it described as a dilution of KIIFB’s core concept and alleged that projects had been prioritised on political considerations. It recommended regulating the board’s borrowings. The cabinet’s decision now places the expert panel’s assessment at the centre of the state’s next steps on infrastructure financing.
The scale of the financial gap is significant for projects already approved or awaiting support. KIIFB’s existing loan liabilities are estimated at about Rs 21,000 crore, while projects waiting for financial assistance would require more than Rs 35,000 crore. The figures indicate that any restructuring will have implications not only for the board’s financial management but also for the timing and funding of infrastructure works linked to it.
The issue has also been politically contested. The United Democratic Front, which was in opposition when KIIFB was launched, had alleged that the Left government’s flagship institution had evolved into a parallel centre of financial power. The present government had announced that KIIFB would be restructured in the state budget, citing the financial crisis and the board’s liabilities.
The immediate formal step is the tabling of the expert committee report in the Kerala assembly. The report’s recommendations, the government’s response and the proposed framework for regulating KIIFB’s borrowings will determine how the institution’s existing obligations and pending infrastructure commitments are handled.
