One of the first announcements that Kerala’s new Chief Minister V.D. Satheesan made after taking charge on Monday (May 18, 2026) was that his government would shortly bring out a White Paper on the state of State finances.

Speaking to presspersons after the first Cabinet meeting of the Congress-led United Democratic Front (UDF) government, Mr. Satheesan said a panel of experts would be constituted for drafting the White Paper. The aim is to inform the people of Kerala about the current status of State finances, he said. The document will be published soon, according to him.

When in the Opposition, Mr. Satheesan and the UDF had consistently attacked the financial policies of the previous Left Democratic Front (LDF) government, accusing it of pushing the State into a debt crisis and failing to prod the Centre into releasing Kerala’s rightful share of financial resources.

KIIFB's future

It also remains to be seen how the new UDF government would approach the Kerala Infrastructure Investment Fund Board (KIIFB), the entity restructured by the then LDF government in 2016 to mobilise funds for large infrastructure projects. In March 2017 itself, Mr. Satheesan, then in the Opposition, had accused the LDF government’s then Finance Minister T.M. Thomas Isaac of using the KIIFB to bypass the Constitution and the Fiscal Responsibility and Budget Management (FRBM) Act, ignoring the possibility that such a step could wreck Kerala’s economy. This parallel mechanism of raising funds through the KIIFB was placing considerable pressure on the exchequer, he had alleged then. The UDF had considered itself vindicated when the Comptroller and Auditor General (CAG) later criticised off-Budget borrowings by the KIIFB and warned that they would push the State into a debt trap.

LDF too had published

This will not be the first time a White Paper is being proposed on the subject of State finances. In 2016, when the LDF government took over from the UDF government led by Oommen Chandy, Finance Minister T.M. Thomas Isaac had tabled a White Paper in the Assembly. In 2023, the Opposition UDF had published its own White Paper. The paper blamed the LDF government for pushing Kerala into a financial crisis and ‘toxic debt.’

More recently, State finances was in focus when Mr. Satheesan, following the UDF victory in the 2026 elections, remarked that the front has inherited an empty treasury from the LDF. Senior Congress leader A.K. Antony, speaking to presspersons, also had alleged that Kerala was a pauper State. He also advised the people not to expect populist measures one after the other from the new UDF government, and some belt-tightening should be expected.

₹6,000-crore cash balance

K.N. Balagopal, who was the Finance Minister in the 2021-2026 LDF government, had countered Mr. Antony’s charge, saying that the Kerala economy is not in a dangerous position as Mr. Antony makes it out to be. “Not just that, it is in a much better position,” Mr. Balagopal had told a press conference recently. This is evident from the Budgets of the State government over the past 10 years of the LDF rule, CAG reports and Union government documents, he said. The treasury had a cash balance of ₹6,000 crore when the LDF government stepped down, according to him.