Sudha Pillai panel finds no case for KIIFB to keep borrowing or funding projects

15 October 2026

A State government committee reviewing the Kerala Infrastructure Investment Fund Board (KIIFB) has recommended that the Board stop borrowing from the market and stop funding projects. The panel said KIIFB's original purpose of raising money outside the State's borrowing limit no longer exists, because the Centre now counts KIIFB loans as the State's own borrowing. The Centre has already cut Rs 25,932.53 crore from the State's borrowing space on this account. The report says the State lost Rs 61,678.46 crore in receipts because of the KIIFB model, while the Board has spent or holds only Rs 48,574.82 crore. Avoidable costs, including higher interest and the Masala Bond, were pegged at Rs 1,250 crore. Only three of 44 projects labelled revenue-earning repay loans from their own income, and State government transfers met 99.4 per cent of KIIFB's debt repayment. The panel also recommended a CAG audit of KIIFB and cancellation of the order that routes motor vehicle tax and petroleum cess directly to the Board.