CAG repeats its stand on KIIFB loans, State government criticizes the decision

THIRUVANANTHAPURAM: The CAG has repeated Central government's stance that loans taken by KIIFB and Social Security Pension Company are extra-budgetary loans and should be included in public debt.

This was stated in the financial report of the last financial year submitted to the Legislative Assembly on Wednesday. The same stand taken by CAG in the financial year 2019-2020 became controversial then. But now they have repeated the stand.

Finance Minister K N Balagopal harshly criticised this in the assembly. He said that the Public Accounts Committee of the Legislative Assembly had rejected the CAG report. KIIFB loans are not a direct liablity to the government, it is only a contigent liability. Moreover, there is a guarantee of return of income from KIIFB projects. The Reserve Bank had suggested about this on last March.Based on that, the effort is to reduce the loan availability of the state for four years and the observation by CAG in last years' report marks the beginning of this, stated the Minister.

Last year, Social Security Pension Company took Rs 8604.19 crore and KIIFB Rs 669.05 crore as non-budgetary loans. Even after deducting the Centre's Rs 5,000 crore, the public debt of the state reached Rs 3.19 lakh crore. The CAG report criticised the government on its financial matters.