The resignation of Kerala Infrastructure Investment Fund Board (KIIFB) CEO K M Abraham on Tuesday is less an administrative move and more the closing note of a deeply contested model of off-budget governance, which now leaves behind a heavy fiscal overhang. Abraham submitted his resignation to caretaker chief minister Pinarayi Vijayan following the LDF's electoral defeat. His exit, over eight years after taking charge on January 1, 2018, marks the end of a tenure that was as controversial as it was consequential.
Controversial Appointment and Tenure
From the outset, Abraham's appointment drew criticism. As a retired IAS officer, he was brought in "on contract" — a technical route that allowed the government to bypass the Kerala Service Rules. This enabled him to draw a salary equivalent to his last-drawn government pay in addition to his pension — a structure critics argued violated the spirit, if not the letter, of service norms governing re-employment. Additional CEO Mini Antony, another retired IAS officer, will take interim charge.
When the LDF returned to power in 2021, Abraham was appointed as chief principal secretary to the chief minister while continuing as KIIFB CEO. By 2024, he was elevated to cabinet rank — an unusual distinction for a retired IAS officer. Under Abraham, KIIFB positioned itself as the financial engine of the state's infrastructure push.
Project Approvals and Completion Gaps
Assembly records up to March 31, 2025, show that the board approved 1,156 projects worth Rs 88,070.26 crore, including 1,149 infrastructure projects (Rs 68,070.26 crore) and seven projects under a Rs 20,000-crore land acquisition pool. However, projects worth only Rs 21,881.42 crore have been completed so far in that period. Another Rs 24,014.91 crore worth of 367 projects remained under implementation.
Repayment Burden and Borrowings
KIIFB's financing model — built on loans and bonds — now translates into a repayment burden of Rs 16,516.83 crore between 2026-27 and 2030-31. Annual repayments will hover around Rs 3,300 crore, peaking at Rs 3,730.30 crore in 2028-29. Borrowings span institutions such as Nabard, REC Ltd, Hudco, State Bank of India, ICICI Bank and KSFE — with interest rates frequently exceeding 9%, and in some cases touching 10.3%. As of August 2025, sanctioned loans stood at Rs 40,828.96 crore, with Rs 28,891.51 crore outstanding — a significant liability when compared to KIIFB's revenue streams.
Lingering Controversies
Even as Abraham exits, controversy lingers. The decision to purchase land and a building worth crores for KIIFB's headquarters — taken just before the assembly election announcement in March — has drawn criticism for its timing and necessity, reinforcing opposition claims of financial imprudence. But the larger questions surrounding KIIFB's model — its off-budget borrowings, execution deficits and revenue fragility — now shift squarely to the incoming government.
Economist's Recommendations
Economist and former head of the state public expenditure review committee D Narayana said drastic and immediate steps are to be taken with regard to KIIFB. "Human resources must be rationalised — personnel already on government deputation should be optimally utilised, while any appointments from outside must undergo strict scrutiny for necessity. No new projects should be taken up at this stage; priority must be to complete ongoing works on a war footing. Projects that haven't moved beyond administrative sanction should be scrapped. Administrative expenditure needs immediate compression, including putting on hold non-essential spending such as the purchase of land and building for the KIIFB headquarters," he said.
