CAG report finds serious violations by Kerala govt

The controversial CAG report, passing serious strictures against the Kerala government for its market borrowings on behalf of its infrastructure development finance company KIIFB, was on Monday tabled in the House.

The report notes the KIIFBI borrowings would become a liability for the state government and asserts the masala bond issued by the company to raise funds was unconstitutional as it amounted to encroaching upon the jurisdiction of the Centre.

The state government took the unprecedented step of presenting a note by finance minister Thomas Isaac on the CAG remarks, which drew loud protests from the opposition benches, who alleged it amounted to a violation of the rules of procedure.

The CAG report mentioned KIIFB did not have its own financial resources, which meant the borrowings would devolve on the state government.