Satheesan alleges LDF left Kerala with Rs 5.07 Lakh crore liability

Kerala Chief Minister V D Satheesan accused the previous LDF government of leaving liabilities of Rs 5.07 lakh crore, including KIIFB debts. He alleged financial mismanagement, questioned treasury fund claims, and said Kerala inherited massive obligations from past borrowings

Thiruvananthapuram: Kerala Chief Minister V D Satheesan on Thursday hit out at the previous LDF government, claiming that it had left behind huge liabilities, including KIIFB borrowings, amounting to Rs 5.07 lakh crore. He also alleged that stories were “created” about nearly Rs 6,000 crore being left in the treasury to mislead the public.

In a scathing attack on the CPI(M)-led Left Democratic Front opposition, the CM questioned why the amount was not utilised to clear some of the liabilities, such as the around Rs 2,000 crore arrears of SupplyCo or the payment of the third instalment of funds to local bodies.

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He also said that thousands of crores of DA and DR arrears of government employees and pensioners remained unpaid when the Left government stepped down.

“Why were some of those liabilities not cleared using the amount reportedly available in the treasury? Instead, a story was created and spread on social media claiming that Rs 6,000 crore was lying in the treasury to mislead the public. This is the financial status of Kerala. There has to be a change in it,” he said.

Referring to the Kerala Infrastructure Investment Fund Board, Satheesan said it had created one of the biggest liabilities-around Rs 56,000 crore-which has now been passed on to the new government. The CM said that when he was in the opposition, he had repeatedly warned that KIIFB borrowings would eventually fall within the state’s borrowing limit, and that is exactly what has happened.

He said the previous LDF administrations had claimed that KIIFB would function independently of the government, would not require state funds, and that its borrowings would not affect Kerala’s borrowing limit.

“However, thousands of crores collected as cess were given to KIIFB. It borrowed huge amounts at very high interest rates with the sovereign guarantee of the state, and its debts were eventually added to Kerala’s borrowing limit,” Satheesan said in the House during the discussion on the vote of thanks for the governor’s policy address.

“On top of that, KIIFB does not generate any revenue on its own. Therefore, its liabilities fell squarely on the government, and now we have been saddled with all of them,” he added. Satheesan said that he had earlier advised the then Left government to ensure that at least 50 per cent of the projects undertaken by KIIFB generated revenue, but his suggestion went unheeded.

He made these allegations while referring to the white paper tabled in the Assembly by him, which states that KIIFB currently has loan liabilities of around Rs 21,000 crore, while projects worth another Rs 35,000 crore remain to be funded, leaving Kerala with a combined obligation of roughly Rs 56,000 crore.

The CM said that while KIIFB was established to accelerate infrastructure development by bypassing the state’s borrowing limits, it gradually evolved into a “parallel world” or “parallel government” operating outside the purview of the Finance Department. He said the white paper was a mirror reflecting the financial mismanagement of the previous LDF administration and contended that extensive fact-checking had been carried out before it was tabled.

Satheesan was responding to Leader of Opposition in the state Assembly, Pinarayi Vijayan’s query on whether any fact-checking had been carried out before tabling the white paper. Vijayan also claimed that the policy address lacked concrete policies for the progress of the state and was silent on the future of various welfare and development activities initiated by the previous government.

Refuting the claims, the CM said that many of the state’s social indicators had stagnated and that comprehensive reforms were required in several sectors. “It is a policy address containing declarations for the future of Kerala. There may be shortcomings, which can be pointed out by the opposition, and we will try to address them in the budget,” he said.