Rs 262 crore diverted from CMDRF, CAG report says many including KIIFB as huge liabilities

THIRUVANANTHAPURAM: The Comptroller and Auditor General (CAG) report for the 2024-25 financial year was tabled in the Assembly. The report has mentioned the state’s financial crisis. The report raises serious concerns about the state's financial management, including off-budget borrowings, mounting liabilities, and the diversion of funds from the Chief Minister's Distress Relief Fund (CMDRF).

The outstanding liability alone is Rs 3,511 crore indicating continued dependence on borrowing to meet expenditure requirements. The CAG found that Rs 262 crore was irregularly transferred from the relief fund to the state’s consolidated fund and that there was also a lapse in financial management. The report also states that KIIFB and the pension company are huge liabilities in the state. The CAG observed that the move effectively reduced the reported revenue and fiscal deficits, raising concerns about transparency in financial reporting.

Presenting the state's economic review for 2024-25, the report noted that Kerala's Gross State Domestic Product (GSDP) growth increased from 9.30% to 9.97%. However, revenue receipts recorded only a marginal growth of 0.30%, while central assistance declined by 42%. Government expenditure increased by 8.97% during the year. The report also highlighted that 64.40% of revenue expenditure and nearly 80% of revenue receipts are being utilized for salaries, pensions, and other employee-related benefits, underscoring the state's limited fiscal flexibility.