KIIFB masala bond anti-constitutional; state encroached on Centre's privileges: CAG report
Thiruvananthapuram: The CAG report has been presented before the Assembly. The report labelled KIIFB's masala bond anti-constitutional and also criticized the state government.
The CAG report stated that KIIFB is the liability of the state government and Masala Bonds are external debts. The report dismissed the government’s argument that KIIFB’s debts are accidental liability and also claimed that KIIFB takes loans without adhering to constitutional guidelines.
It is mentioned that KIIFB does not have its own source of income and the debts will become liability to state’s income.
The CAG report also accused the state government of violating the 7th schedule of Indian constitution. Only central government has the authority to borrow foreign funds. Hence, Kerala’s action violates the constitutional guidelines.
The report accuses Kerala of encroaching into Centre’s privileges. It also added that RBI’s approval to masala bond can be questioned.