THIRUVANANTHAPURAM: The amped-up Kerala Infrastructure Investment Fund Board (KIIFB), which is at the heart of the Rs 20,000-crore anti-recession package, is all set to come into being. The cabinet will discuss the ordinance on Kerala Investment Fund Board (Amendment) Act, 2016, on July 27 and will promulgate it in a week. Along with the ordinance, a government order will also be issued detailing the manner in which departments will have to submit project proposals to KIIFB. The government is also in talks with former RBI governors to take over as the chairman of KIIFB.
The ordinance will augment the Kerala Investment Fund Board Act, 1999, which now looks obsolete, with modern clauses that will enable the Board to seek money with considerable freedom. A radical clause in the ordinance would be to create a Funds Trustee and Advisory Commission (FTAC). This will be an independent Commission, a regulatory body, which will be chaired by a person of international eminence from the area of finance or banking and will have only economists, bankers or administrators of national repute as members.
The primary role of FTAC will be to ensure that all investments of the Fund are as per the approved scheme and that there is no diversion of funds of KIIFB. Another crucial amendment would be the designating of revenue streams for KIIFB; the transfer of a part of the motor vehicles tax (MVT) and the whole of petrol cess to the Board. The roadmap of the MVT transfer, the incremental 10 percent every year till its swells to 50 percent by the fifth year, will also be specified.
The ordinance will also have the necessary amendments to allow KIIFB, which now is a highly restricted body, to employ a range of financial instruments like bonds and innovative financial structures approved by RBI and SEBI like Alternative Investment Funds (AIF), Infrastructure Investment Trust (InvIT) and Infrastructure Debt Fund (IDF). The ordinance will also have a clause that will prohibit the diversion of KIIFB money to the Treasury or to departments.
