Grey area in 'white paper'. Thomas Isaac says 'substantial portion' AI-generated

On June 4, right before Chief Minister V D Satheesan tabled 'Kerala's Fiscal Health: A Status Report' in the Assembly, former finance minister K N Balagopal alleged that data stored in the 'secret section' of the Finance Department had been made available to individuals outside the Department. Balagopal's predecessor T M Thomas Isaac has gone a step further.

He said that Finance Department data, including those kept in 'secret section', has been handed over to unidentified AI platforms. "When checked using AI detection tools, it was found that a substantial portion of the 'white paper' was generated using AI tools," Thomas Isaac told reporters at AKG Bhavan on Friday.

He said it was the quick preparation of such a large document (the 'white paper' is 195 pages) that had aroused suspicion and prompted him to verify the AI contribution. "Don't get me wrong. I am not against the use of AI, and no one can take such a stand in these times. Problem is, secret data is now in the public domain. It has been transferred to a private AI platform to generate the 'white paper'," Isaac said.

The former finance minister wanted the Chief Minister to come clean. "Has such a thing happened, and which AI tool has been used," was Isaac's poser to the CM. He said the Supreme Court, High Court and the Union Finance Ministry had issued clear guidelines on how to employ AI to analyse official documents. 

He said that the High Court guidelines on July 19, 2025, laid down that only approved AI tools could be used, that sensitive data should not be shared with Large Language Models (LLMs), and that there should be human oversight.

He said that the Union Finance Ministry prohibits the use of external AI tools like ChatGPT on official devices to protect confidential government data from leaks and unauthorised access.

Isaac pointed out two AI-induced "errors" in the 'white paper'. One was the low development expenditure the 'white paper' has attributed to Kerala.

"It says that it is far lower than all other states. I was surprised. On a closer look I found that the figures were taken from the RBI's Study of Budgets," Isaac said. "In the RBI document, the transfers to the local bodies are not included as capital expenditure. RBI deems it as a grant. Fact is, there is not a single non-development rupee in the transfers to local bodies. It cannot be used for salaries, too," he said.

His argument was that the AI tool could not identify the nuance and came up with a faulty inference. "Clearly, there was non application of mind," Isaac said. 

Huge cuts in the plan expenditure for SC and ST groups was the other anomaly Isaac came up with. He termed the SC/ST figures shown in the 'white paper' "baseless and politically motivated". "Kerala is the only state in the country that allocates more for the SC and ST communities than their share in the population," Isaac said.

The table in the 'white paper' shows a steady decline in the allocations for SC/ST/OBC communities since 2017-18. The Scheduled Caste constitute 9.1 per cent of the population, and Scheduled Tribe 1.5 per cent. Isaac said that Kerala had consistently kept 9.81 per cent for SC and 2.83 per cent for ST from 2017-18 to 2025-26. 

The 'white paper', on the contrary, shows it tapers from 9.24 per cent in 2017-18 to 3.85 per cent in 2025-26. Isaac said that such a mistake crept in because the LLM used to prepare the document relied on certain figures of the LDF government that the 'white paper' itself had termed "improper". 

The LDF government had clubbed the expenditures of KIIFB and other agencies and loans to KSRTC, which are outside the Plan, with the normal plan expenditure on schemes. As a result, plan utilisation since 2020-21 has always been 20-40 per cent above the annual outlay; in 2021-22 for instance it was 142 per cent. 

Isaac's argument was that the AI tool used was unaware of this detail and therefore calculated the SC and ST share based on the plan expenditure figures that included KIIFB and KSRTC spending. "If they say that it was wrong to club other expenditures with the plan expenditure, why did they calculate the share of SC and ST spending based on what they themselves called improper figures," Isaac said.