KIIFB has spent Rs 48 crores as ‘other expenses’ in 2019-20

Rs 25 crore was spent for advertising and promotion in 2019-20 and in 2018-19, it was just Rs 36 lakh
KIIFB has spent Rs 48 crores as ‘other expenses’ in 2019-20

According to official data, around Rs 48 crores was spent by Kerala Infrastructure Investment Fund Board (KIIFB) as other expenses in the 2019-2020 financial year.

KIIFB is a Kerala government-owned financial institution set up to mobilise funds for infrastructure development from outside the state revenue.

While, the 2019-2020 financial year audited statement of KIIFB reveals that around Rs 48 crore was spent as other expenses, in 2018-19, it was just Rs 21 cores.

The 2019-2020 financial year statement also reveals that around Rs 25 crores was spent on advertisement and promotion, and Rs 15 crores, on technical and consultancy charges.

The 2018-19 financial statement shows that only Rs 36 lakhs was spent on advertisement and promotion.

Rs 6 cr just for Digital Media Promotion

Around Rs 6 crores was spent for just digital media promotion in the advertisement and promotion category during 2019-2020.

Talking to The NationWide, PG Sunil Kumar, a financial analyst, said that spending Rs 25 crores for advertisement and promotions itself is a waste of the state’s money.

“The state is going through a tough time. Our financial situation is very bad. Revenue deficit for 2020-21 is targeted at Rs 15,201 crore, or 1.6% of the Gross State Domestic Product (GSDP), and the fiscal deficit is targeted at Rs 29,295 crore (3% of GSDP). At this time, throwing away money for such gimmicks is a crime,” L Narayan added.

According to a White Paper published by the state government in 2019, the state’s public debt rose from Rs 1.5 lakh crore in 2016 to Rs 2.5 lakh crore in three-and-a-half years.

The document stated the per capita public debt had increased from Rs 46,078 to Rs 72,430 during the period.

Commenting on the rise in expense in advertisement and promotion in 2019-2020, PJ James, a senior leader from CPI (ML) Red Star, said that an increase from Rs 36 lakh to Rs 25 crores on expenditure for advertising and promotion reveals that the money is being spent eyeing elections.

“We had parliament polls last year. That might be one reason. And this government is in its last lap too. So, they want to create a feeling that development is happening on the ground. And for that, advertisement is needed. And they have done it with the taxpayers money,” James added.

No Internal Auditing

Interestingly, the 2019-20 financial audited statement reveals that there was no internal audit system in the Board.

“However, internal checks and controls have been put in place and in 2020 February a senior auditor has been appointed,” the financial statement reveals.

KIIFB, which has been entrusted to carry out projects worth Rs 50,000 crore, has always landed in controversy over the lack of transparency.

Since the beginning, there has been tussle between CAG and Kerala finance minister Dr Thomas Issac over auditing KIIFB.

Denying a comprehensive audit into KIIFB, the Kerala finance minister had given a written reply in the Assembly that KIIFB, formed under 1999 Act, is a statutory corporate body.

A statutory corporation is a corporation set up by the state, which might be ordinary companies/corporations owned by a government with or without other shareholders, or they might be a body without shareholders that is controlled by national or sub-national government to the extent provided for in the creating legislation.

Life Insurance Corporation, Food Corporation of India and Airport Authority of India are a few examples of statutory corporations in India.

According to the Kerala finance minister, the CAG is free to audit all receipts and expenditures of KIIFB, including those related to Masala Bond, “as the authority is empowered to do so under Section 14(1) of the CAG Act”.

“The CAG has the power to audit all the accounts of KIIFB under Section 14(1), while Section 14(2) empowers the authority to approach the government if it finds scope for auditing beyond Section 14(1),” the minister had said then.

Pointing out that an audit under Section 20 of the Act will be applicable only when CAG is not vested with the audit of an institution under any of the clauses in the Act, the Kerala finance minister said that none of the public sector companies or institutions in Kerala is being subjected to CAG audit under Section 20.

The CAG had asked the government permission to audit KIIFB under Section 20 (2) of the Comptroller and Auditor General’s (duties powers and conditions of service) Act, 1971, as its auditing scope is limited under the Section 14 of the Act.

In simple words, through CAG’s Section 14, audit cannot be done on funds raised from the market. KIIFB is raising funds from markets other than government grants.

Recently, the CAG had done an auditing of KIIFB and handed over the report to the Kerala Assembly.

Unfortunately, Kerala finance minister violated the norms of CAG report and raised allegations against CAG at press conferences.

Isaac alleged that the CAG is trying to scuttle the development of Kerala by scheming with RSS-led forces in Delhi.

On November 14, Isaac alleged that he has seen the draft report of CAG’s KIIFB audit, which has remarks alleging violation of the Indian Constitution in connection with taking loans.

“Auditor is Watchdog, not a Blood Hound,” he posted on his official Facebook page even before the final report has been placed in the Kerala Assembly.

Kerala Opposition parties alleged that Isaac talking openly about a CAG report which has not yet been placed in the Assembly is a violation.

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