Thiruvananthapuram, Jan 20 (PTI) The Kerala Assembly on Wednesday witnessed heated exchanges over the CAG report on external borrowings by KIIFB with opposition Congress led UDF alleging wrongdoing by the LDF government and demanding the resignation of Finance Minister T M Thomas Issac before staging a walkout.

However, the treasury benches defended the Finance Minister and the Kerala Infrastructure Investment Fund Board, saying that the CAG report was a 'conspiracy' against the Left government in the state.

The UDF members staged a walkout as Speaker P Sreeramakrishnan disallowed an adjournment motion sought to be moved by the opposition over the issue after over a two hour long discussion in the house.

The discussion began after Congress's V D Satheesan moved notice for an adjournment motion over the report, tabled in the House on Monday and the Speaker granted permission for the discussion on Isaac's request.

Unleashing a scathing attack on Isaac,Satheeshan said the minister's argument that the CAG was wrong in criticising the KIIFB and noted that the agency was empowered to conduct an audit under theConstitution.

"In 2017-18, the CAG tabled a report in Parliament in which it had strongly criticised the Modi government.

If the agency can do so, why can't they criticise the Pinarayi Vijayan government?" Satheeshan asked.

The opposition also alleged that the KIIFB had violated Article 293(1) of the Constitution.

"As per Article 293(1), KIIFB cannot borrow from abroad. The board had taken loans from abroad, violating the constitutional norms, which has been pointed out by CAG " Satheesan said.

Defending the borrowing, Isaac said Article 293(1) quoted by the opposition deals with borrowings of the government. However KIIFB does not fall under the purview of this Article, and it is a body corporate, he said.

The FM alleged that certain statements made in the CAG report were not correct.

"There was no reference to off-budget borrowings of the KIIFB in the draft CAG report. But it was added in the final report.

A democratically elected government has the right to reject the CAG report," Isaac said.

He also added that the borrowings of KIIFB was a contingent liability.

The Finance minister said the government used the opportunity to list KIIFB in the London Stock Exchange, sending out a message that an infrastructure company from a small state like Kerala has the competency to borrow funds from an institution like the LSE

Leader of the Opposition Ramesh Chennithala alleged the government has done wrong while borrowing funds from abroad and leaking the report before it was tabled in the Assembly.

"The minister has blatantly violated the constitutional provisions and we are not satisfied with his explanation. We demand his resignation," Chennithala said.

He also alleged that the KIIFB fund through Masala Bond was not used at all, but the government had paid an interest of over Rs 300 crore.

CPI(M) legislator James Mathew sought to know why the Centre was not taking any action against the state government if the KIIFB borrowing was unconstitutional.

"If it is unconstitutional, won't the Centre dissolve the state government?This a joint conspiracy by Congress and BJP."

In the recent report, CAG had said the off-budget borrowings through KIIFB, which mobilises funds for infrastructure development from outside the state revenue, were not in accordance with Article 293(1) of the Constitution and "bypasses the limits set on Government borrowings".

"These borrowings are not taken into the disclosure statements in the budget documents or in the accounts and hence such borrowings do not have legislative approval," it stated. PTI

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)