By Suresh Unnithan
Five months into its tenure, the V.D. Satheesan-led United Democratic Front government has revealed a consistent preference for procedural restraint over decisive action when confronting the corruption allegations and fiscal irregularities inherited from the previous Left Democratic Front administration. What was presented during the election campaign as a commitment to clean governance has, in practice, translated into preliminary inquiries, defensive litigation postures, and delayed follow-through. The pattern is most evident in the handling of the CMRL-Exalogic matter involving Pinarayi Vijayan, the slow investigation into Public Service Commission irregularities, and the government’s response to the substantial liabilities and structural flaws of the Kerala Infrastructure Investment Fund Board.
In the CMRL-Exalogic case, the Enforcement Directorate forwarded a report alleging that payments totalling between ₹2.78 crore and ₹3.28 crore had been made by Cochin Minerals and Rutile Limited to Exalogic Solutions, a firm linked to Vijayan’s daughter T. Veena, without corresponding services. The agency sought action under the Prevention of Corruption Act against Vijayan, Veena, and his son-in-law P.A. Mohamed Riyas. Rather than register a First Information Report, the government, after obtaining the Advocate General’s opinion, directed the Crime Branch to conduct a preliminary inquiry. Chief Minister Satheesan and Home Minister Ramesh Chennithala characterised the decision as a legally required exercise of caution, citing Supreme Court precedents on preliminary inquiries in certain corruption cases.
The decision provoked open dissent within the Congress. MLA Mathew Kuzhalnadan criticised the approach as unduly soft and walked out of a legislative party meeting after confronting the Chief Minister. Former KPCC president K. Sudhakaran and UDF convener Adoor Prakash publicly supported the demand for stronger action, with Sudhakaran questioning the government’s willingness to proceed against a former Chief Minister. KPCC chief Sunny Joseph defended the preliminary inquiry as mature and practical while cautioning party colleagues against public criticism. The Kerala High Court subsequently directed the Vigilance and Anti-Corruption Bureau to register cases, which were filed. Vijayan and members of his family challenged the orders, and the Supreme Court later granted temporary relief. The sequence has reinforced the perception that the initial preference for a preliminary inquiry, and the government’s defence of that position, contributed to further delay. The contrast with the relatively expeditious closure of earlier allegations against Satheesan in the Punarjani foreign-fund matter has sharpened the criticism of selective procedural caution.
A parallel failure of urgency is visible in the investigation into irregularities in Kerala Public Service Commission examinations, including the Planning Board recruitment process in which answers carrying substantial marks were left unevaluated, allegedly distorting the rank list. The High Court has repeatedly expressed dissatisfaction with the pace of the Crime Branch probe. Justice A. Badharudeen’s observations—questioning whether the government was engaged in a “Bhai-Bhai” approach and noting that the Commission’s petition appeared to be used to stall proceedings—underline the seriousness with which the court views the matter. The irregularities originated under the previous LDF-appointed Commission. The absence of demonstrable acceleration under the present government has raised legitimate questions about the administration’s commitment to restoring public confidence in a constitutional recruitment body on which the employment prospects of large numbers of candidates depend.
The fiscal legacy of the Kerala Infrastructure Investment Fund Board presents an even clearer instance of documentation outpacing action. The White Paper on Kerala’s fiscal health, tabled in June 2026 and prepared by a committee chaired by former Cabinet Secretary K.M. Chandrasekhar, described KIIFB as having evolved into a parallel fiscal authority. It estimated a combined obligation of approximately ₹56,000 crore, comprising roughly ₹21,000 crore in outstanding loan liabilities ultimately to be serviced by the state and a further ₹35,000 crore required for projects already approved. Of more than ₹42,000 crore mobilised through borrowings, less than ₹10,000 crore had been repaid by March 2026, while finance costs alone approached the principal repaid. Subsequent figures indicated that over 75 per cent of the mobilised amount remained outstanding. KIIFB’s cost of funds exceeded the state’s own market borrowing rates by 1 to 1.5 percentage points, generating an annual excess interest burden estimated between ₹396 crore and ₹420 crore. The 2019 Masala Bond was singled out for unjustifiably high issuance costs and inadequate documentation, with excess costs later estimated at ₹181–183 crore. Approximately ₹25,933 crore was deducted from the state’s borrowing space once the Centre and the Comptroller and Auditor General treated KIIFB debt as state debt. Between 2021-22 and 2024-25, government transfers covered 99.4 per cent of KIIFB’s debt servicing, leaving negligible resources for new infrastructure. The continued diversion of half the Motor Vehicle Tax into an escrow account further constrained fiscal flexibility.
Project allocation reflected political rather than developmental criteria. Kannur alone accounted for over 20 per cent of approved amounts; together with Thiruvananthapuram and Ernakulam, three districts absorbed nearly half the total without corresponding justification in need or development indices. Land acquisition practices attracted the sharpest criticism. An expert committee chaired by Sudha Pillai identified large-scale approvals—citing 5,366 acres at an estimated ₹12,727 crore—granted on the basis of generic concept notes without detailed project reports or adequate cost-benefit analysis. Approximately 1,000 acres in Kannur were acquired for ₹2,489–2,498 crore, in some cases at rates reported to be up to five times the prevailing market value. After five years, only a small portion had been utilised. Notifications for an additional 3,829 acres at a projected cost of ₹9,572 crore remained pending. Kannur accounted for more than half of the land-acquisition outlay in certain assessments. The committee estimated that the KIIFB financing model itself produced additional costs of about ₹13,103 crore relative to direct government execution and identified total commitments of ₹70,415 crore extending to 2041-42. Procedural violations, including the circumvention of Finance Department objections, were also recorded.
Both the White Paper and the subsequent expert report recommended the cessation of independent external borrowing by KIIFB, the servicing of liabilities through ordinary budgetary borrowings, a forensic or comprehensive audit, and statutory reform while retaining useful institutional capacity within regular departments. The government has indicated that it will determine further inquiries after review. Months after the White Paper’s release, the conversion of these findings into concrete vigilance or criminal proceedings remains limited. The political utility of highlighting the previous regime’s fiscal record has been realised; the corresponding institutional response has been markedly slower.
The government’s approach reflects a calculated political balance. Immediate and aggressive prosecution of a former Chief Minister who continues to lead the opposition risks the charge of selective vendetta, particularly given the earlier closure of allegations against the present Chief Minister. Yet the consistent preference for preliminary inquiries, the defence of that preference in court, the judicial criticism of investigative pace in the PSC matter, and the gap between detailed fiscal exposure of KIIFB and decisive remedial action have produced the opposite perception: that the administration is reluctant to dismantle the political and administrative arrangements of its predecessor. Internal dissent within the Congress, criticism from the BJP, and counter-allegations from the LDF all derive from this same pattern of measured restraint.
The early months of the Satheesan government have therefore been defined less by a decisive break with the previous decade than by continuity in caution. Courts will continue to examine both the substance of the allegations and the state’s handling of them. The record thus far—preliminary inquiry in place of an immediate FIR, judicial dissatisfaction with the pace of investigation, comprehensive documentation of KIIFB’s liabilities without commensurate accountability, and visible strains within the ruling coalition—already demonstrates a preference for procedural management over uncompromising enforcement. That preference now constitutes the central test of the administration’s claim to deliver accountability.