Kerala finance minister Thomas Isaac on Tuesday alleged a “massive conspiracy” to scuttle development work in Kerala, pointing out that the Comptroller and Auditor General of India had added several pages of previously not discussed remarks against an ambitious project without even seeking the state’s explanation.

The minister corrected himself and said the “draft” CAG report he had been referring to for the past three days was in fact the final report of the central audit machinery.

On how he had earlier concluded that it was a “draft” report, Isaac told a media conference in Alappuzha on Tuesday that he had never seen a final report that contained remarks that were not addressed in the draft report.

“Never before had I seen anything in a final report that had not been discussed or explained in a draft report. The CAG has added four new pages of remarks against the KIIFB (Kerala Infrastructure Investment Fund Board),” the finance minister said.

“How can I assume that certain remarks that were not even made during the exit meetings with the CAG would find place in the final report?” Isaac asked.

The CPM veteran said the four additional pages in the CAG report dealt with the constitutionality of floating masala bonds in the London Stock Exchange to raise funds for the KIIFB, registered as a corporate body under the state government.

“They added these pages in Delhi without even informing the state government…. This is not a small game but a massive conspiracy to destroy Kerala,” Isaac alleged. “It’s not whether this is a draft or final report. The issue is how it will affect development work in Kerala,” he added.

The finance minister said one of the three points raised by the CAG was about loans taken by the KIIFB to fund infrastructure development in Kerala.

The CAG has described the borrowings as “off-budget loans”. It has also remarked that the loans taken by the KIIFB were as good as state loans and hence created a liability and was in violation of Article 293 (1) of the Constitution that makes central approval mandatory for all such borrowings. The third point was about the KIIFB’s Rs 2,150 external borrowings via masala bonds listed last year at the London Stock Exchange.

Isaac refuted the CAG’s charges and said the KIIFB loans were entirely “on-budget”. “A separate agency is taking this loan just to circumvent the borrowing ceiling on the state government. But the government provides money for the KIIFB to repay the loans via 50 per cent of the motor vehicles tax and petrol cess,” the finance minister noted.

But the admission that Isaac was in possession of the final report of the CAG before even tabling it in the Assembly became a whip in the hands of the Opposition.

Leader of the Opposition Ramesh Chennithala termed it a “gross violation of his oath of office” and demanded Isaac’s resignation. “He has committed a grave violation of procedures and insulted the Assembly,” Chennithala said.