Cabinet accepts report conceding all charges on KIIFB's ₹1 lakh crore projects
GS2Polity · Governance · IR· Statutory, regulatory & quasi-judicial bodies· Mains·
Fiscal Federalism and infrastructure funding: a GS2 case study on balancing capital expenditure with the FRBM Act.
Why in news
The Cabinet accepted a report conceding all charges against KIIFB's ₹1 lakh crore projects following Union government allegations of violating Article 693 and the FRBM Act.
Background
The UDF government faces an infrastructure deficit with a capital expenditure to GSDP ratio of 1.34%. The Cabinet's decision limits KIIFB to completing ongoing projects without providing an alternative for future investment.
Facts for Prelims
- FactCapital expenditure to GSDP ratio: 1.34%
- ConstitutionArticle 693: Cited in allegations regarding KIIFB projects
- Act / BillFRBM Act: Cited in allegations regarding KIIFB projects
- FactKIIFB sanctioned projects worth more than ₹1 lakh crore
Prelims practice question
Which act was cited in the allegations regarding the funding of KIIFB projects?
- (a)MSMED Act
- (b)FRBM Act
- (c)GST Act
- (d)PMLA Act
Show answer
Answer: (b) FRBM Act — The note mentions the FRBM Act was cited in allegations regarding KIIFB's projects.
For Mains
Q. Discuss the fiscal implications of state-level infrastructure funding bodies and the necessity of balancing capital expenditure with fiscal responsibility under the FRBM Act.
Dimensions to cover in your answer
- Fiscal federalism: Conflict between state-led infrastructure ambitions and Union-mandated fiscal deficit limits
- Regulatory oversight: Enforcement of FRBM Act on state-level investment vehicles
- Infrastructure deficit: Low capital expenditure to GSDP ratio impacting regional development
Keywords: Fiscal Federalism · Capital Expenditure · FRBM Act · Infrastructure Deficit · Statutory Oversight
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