Thiruvananthapuram: The Comptroller and Auditor General (CAG) report which was tabled in the Kerala Assembly on Monday is highly critical of the Kerala Infrastructure Investment Fund Board (KIIFB) and the international funding it received through ‘Masala Bonds’.
The CAG in its report said that foreign funding can be accepted only by the central government and the special permission granted by the Reserve Bank of India for this collection has to be reviewed.
The CAG report said that the KIIFB is acting as a centre beyond the Kerala budget and added that this is against the Constitution of the country. It also stated in the report that the state government had deliberately entered into the domain of the central government and it is unacceptable. The report also pointed out that if all state governments start accepting international loans like this, the financial situation of the country will become precarious.
The report also states that the Kerala government’s contention that the loans taken by the KIIFB was owing to sudden requirements cannot be taken into consideration.
The state government is the guarantor for the loans taken by KIIFB and during the Covid pandemic the revenue of the state government had taken a major dip. This had affected the repayment of KIIFB loan also and the CAG report asked how the state government can take loans for KIIFB through ‘Masala Bonds’ without the permission of the state Assembly.
The opposition had come out against Kerala Finance Minister T.M. Thomas Issac conducting a press conference and leaking the contents of the CAG report before it was tabled in the house. Congress leader V.D. Satheeshan had moved a privilege motion against the finance minister and Issac was called before the Assembly committee and had to explain his argument.
The opposition has been relentlessly saying that the Kerala government had overlooked the Kerala Assembly, that the state government was infringing on the rights of the central government by deliberately accepting international funds as loans and circumventing the role of the Centre.
Satheeshan, while speaking to IANS, said “The opposition has been campaigning inside and outside the House on the government operating a separate financial entity like KIIFB while overlooking the Assembly and the Budget. The state government and its finance minister have a lot to explain.”