SC Nudges Centre for Response on Kerala’s Urgent Fund Relief Plea

SC Nudges Centre for Response on Kerala's Urgent Fund Relief Plea

VoM News Desk | January 25, 2024 | 10:58 PM IST | Breaking News, Courts & Law | Follow on Google News

SC Nudges Centre for Response on Kerala’s Urgent Fund Relief Plea

SC Nudges Centre for Response on Kerala’s Urgent Fund Relief Plea

The Supreme Court has prompted the Centre to submit a response to the Kerala government’s plea, urgently seeking the release of funds. Justices Surya Kant and KV Viswanathan listed the matter for further hearing on February 13. Kerala’s petition highlights the alleged interference by the Centre in the state’s finances, hindering the fulfillment of annual budget commitments. Senior advocate Kapil Sibal, representing Kerala, emphasized the urgent need for funds to pay state employees. However, Attorney General R Venkatramani, representing the Centre, contested the urgency of the plea.

Kerala’s Financial Struggle Amidst Centre’s Interference

In its legal suit, the Kerala government argues that the Centre, through various letters and amendments, interfered with the state’s finances by imposing a Net Borrowing Ceiling. This interference, as claimed by Kerala, restricts the state’s borrowing capacity, impacting welfare schemes, payments to employees, and State-Owned Enterprises. The petition points out reductions in Net Borrowing Ceiling, including deductions from the Public Account and state-owned enterprises’ borrowings. The suit contends that such interference results in unpaid dues and financial constraints, amounting to Rs 26,226 crores as of October 31, 2023.

Constitutional Clash: Kerala Challenges Centre’s Powers

Kerala’s legal challenge goes beyond financial struggles, asserting a violation of fiscal federalism principles. The suit argues that the Centre’s interference creates unconstitutional limits, impeding the state’s exclusive powers to regulate its finances. The Kerala government contends that the suit raises a dispute regarding the Centre’s authority to interfere with the state’s autonomous financial powers, challenging several provisions of the Constitution. The legal battle underscores the broader constitutional implications of fiscal autonomy.

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