Centre, Kerala spar in Supreme Court as financial aid talks hit an impasse
The Hindu
The bugle has sounded for a legal battle between the Centre and Kerala in the Supreme Court, after the Union government said on March 13 that it could only spare ₹5,000 crore as a one-time measure to avert an immediate financial crisis in the Kerala.
The bugle has sounded for a legal battle between the Centre and Kerala in the Supreme Court, after the Union government said on March 13 that it could only spare ₹5,000 crore as a one-time measure to avert an immediate financial crisis in the Kerala.
The amount offered by the Union government will not be enough to fulfill Kerala’s most basic financial commitments, including pensions and salaries, senior advocate Kapil Sibal and C.K. Sasi, representing the State, told a Bench of Justices Surya Kant and K.V. Viswanathan.
The Union government also said it would deduct ₹5,000 crore from the State’s net borrowing ceiling in the first nine months of the financial year 2024-2025, and stipulated that the State would not be allowed any “ad-hoc” borrowing in 2024-2025 if it takes the ₹5,000 crore being proffered now.
Mr. Sibal said that the Union government’s objective was to simply “strap the State down and control its finances”. Rejecting the Centre’s offer, he said: “We want an absolute minimum of at least ₹10,000 crore. This ₹5,000 crore does not take us anywhere. I will not be able to pay my people.”
The court was hearing an original suit filed by Kerala accusing the Union government of interfering with its borrowing limits and financial affairs in violation of the principle of federalism.
In an earlier hearing, Justice Kant said that the suit was probably the first of its kind in the Supreme Court. The court listed the case to hear arguments for interim relief on March 21.
The Bench had initially urged the Union and State governments to resolve the issue out of court. However, Wednesday’s hearing saw any hope for an amicable resolution fade away as Additional Solicitor General N. Venkataraman, appearing for the Union government, read from a note detailing the statistical projections and reasons for limiting financial help to Kerala.
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