An expert committee will be constituted for “comprehensive structural reforms and overhaul” of the operational framework of the Kerala Infrastructure Investment Fund Board (KIIFB), Chief Minister V.D. Satheesan said, presenting the 2026-27 Revised Budget in the Assembly on Friday.

The Budget speech noted that KIIFB relies on off-budget borrowings at interest rates significantly higher than that incurred on standard sovereign State borrowings. “This has inexorably pushed the State’s borrowings and debt burden beyond permissible limits, triggering grave macroeconomic imbalances,” it said.

White Paper

The observations in the Budget are in line with those made in the White Paper on the State’s fiscal health tabled by the UDF government in the Assembly on June 4. The committee, headed by former Cabinet Secretary K.M. Chandrasekhar, which drafted the White Paper had recommended a revamp of the KIIFB Act, 2016, and a forensic audit of KIIFB accounts. At the same time, it noted that dismantling the KIIFB framework which has built valuable capabilities over the years would be “wasteful.” Parallel governance structures such as KIIFB have drained part of the revenue flow on the one hand and creating massive liabilities on the other, the White Paper had noted.

Presenting the Revised Budget, Mr. Satheesan said his government was “saddled with settling an aggregate accumulated liability of ₹87,012 crore,” noting that this included a looming debt repayment obligation of ₹21,000 crore for KIIFB. Other liabilities included ₹21,670 crore in Dearness Allowance (DA) arrears and ₹14,387 crore in Dearness Relief (DR) arrears, ₹3,431 crore owed to banks and contractors through bill discounting, ₹9,245 crore in other deferred obligations, and the Kerala Social Security Pensions Ltd. company’s liability of ₹17,279 crore.