Off-budget borrowings through KIIFB may lead to a debt trap: CAG
The State’s debt which was at Rs 1.90 lakh crore has risen to Rs 3.24 lakh crore over five years, the CAG points out in its annual audit report.
The State’s debt which was at Rs 1.90 lakh crore has risen to Rs 3.24 lakh crore over five years, the CAG points out in its annual audit report.
The State’s debt which was at Rs 1.90 lakh crore has risen to Rs 3.24 lakh crore over five years, the CAG points out in its annual audit report.
Thiruvananthapuram: The Comptroller and Auditor General of India (CAG) report tabled before the State Assembly warns the Government that the off-budget borrowings made through Kerala Infrastructure and Investment Fund Board (KIIFB) and Kerala Social Security Pension Limited (KSSPL) may lead to a debt trap.
The State’s debt which was at Rs 1.90 lakh crore has risen to Rs 3.24 lakh crore over five years, the CAG points out in its annual audit report.
The off-budget borrowings made through entities like KIIFB are outside the purview of the Assembly. Besides the State’s total debt of Rs 3.08 lakh crore, the borrowing of Rs 16,496 crore outside the budget, has made the total debts reach Rs 3.24 lakh crore.
The total debt should be only 29.67 per cent of the Gross State Domestic Product (GSDP). This has now reached 39.87 per cent. If the off-budget borrowings of the State are also added up, it comes to 42.80 per cent. While 42 per cent of the debt is to be repaid within 5 years, the rest must be repaid within 7 years. The borrowings are to be spent on developmental projects of the State. However, over the past 5 years, it is being used for administrative expenses. The CAG pointed out that it is not a good wont to borrow again to repay the previous borrowing spent for administrative expenses.
Excerpts from the report
•Through the revenue had dipped, the revenue expenditure was managed with the Centre’s aid.
•The State understated Rs 244 crore in Revenue deficit and Rs 9471 crore in Fiscal deficit.
•Rs 7600 crore drop in tax revenue from GST, Excise, vehicle tax, stamp duty, and land tax.
•Eight companies in which the State has invested Rs 315 crore are in loss. The State had invested Rs 2164 crore in these companies until March 31, 2021. The investment stuck in 16 companies currently inoperational, stands at Rs 33 crore.
•A large share of the borrowing (Rs 100 crore) for social welfare activities was given to Pariyaram Medical College to repay its debt from Ernakulam District Cooperative Bank. About 72 per cent (Rs 1739 crore) of the borrowings made for financial services was given to the KSRTC.
• The State has invested Rs 10064 crore in various institutions at an interest rate of just 1.34 per cent. Meanwhile, the borrowings made are at an interest rate of 7.31 per cent.