KIIFB’s accounts should have been audited by CAG, Kerala High Court says

The previous state government’s decision not to entrust the audit of the Kerala Infrastructure Investment Funds Board (KIIFB) to the Comptroller and Auditor General (CAG) is more than worrisome, the Kerala High Court said.

Chief Justice Soumen Sen and Justice VM Syam Kumar said the previous government should have allowed the audit, especially in view of the “huge irregularities” noted in the preliminary report.

The court ruled that transparency must be maintained in KIIFB’s accounting and operations because it was financed by the state, which had guaranteed its loans. The court also expressed its displeasure over KIIFB’s unfavorable attitude towards the CAG audit.

Present the government’s position

The court observed that the present government had decided to restructure KIIFB and had the CAG conduct a comprehensive audit of KIIFB’s accounts on the recommendation of the expert committee.

The court was hearing a public interest litigation filed by P. Anilkumar of Kasaragod seeking an audit of the accounts of KIIFB by the CAG. The petitioner alleged that the guarantees given by the state government to KIIFB against the loans circumvented the limits set by the Union government, thereby in effect creating “extra-budgetary loans” that threatened the fiscal stability of the state and required the mandatory supervision of the CAG.

An affidavit filed by the CAG in this regard showed that the outstanding balance of loans received by KIIFB as on March 31, 2024 was ₹20,041.52 crore. The CAG said the state has committed to repay the principal and interest on these loans. Entrusting the audit of KIIFB’s accounts to the CAG would empower it to conduct a comprehensive audit, including certification of accounts, to ensure that KIIFB’s financial statements are prepared in a true and fair manner, the affidavit said.

The court granted the action, holding that the petitioner’s grievances were substantially resolved by the state’s audit.

Published – 13 Nov 2026 21:23 IST