Supreme Court Posts Kerala’s Suit Against Centre Over Borrowing Curbs On Feb 13 To Consider Interim Relief Application

The Supreme Court in the case State of Kerala v. Union of India observed and has asked the Centre to file its response to an interim relief application filed by the Kerala government, as part of its plea against alleged interference by the central government in the state’s finances.
In the present case, the State of Kerala moved the apex court last December, wherein asserting that the Centre’s actions were impinging on the state’s ability to fulfill its commitments outlined in its annual budgets.
The Supreme Court in the case observed and has issued the notice in this plea earlier in January, seeking the central government’s response.
The bench comprising of Justice Surya Kant and Justice KV Viswanathan was hearing the present matter wherein the original suit was filed under Article 131 of the Constitution of India.
The counsel, Senior Advocate Kapil Sibal, representing the State of Kerala, stressed the urgency of the situation, citing the impending budget deadline on January 31.
He in the case requested an expedited response to prevent the suit from becoming infructuous.
On the other side, the counsel, Attorney General R Venkataramani, representing the central government, contested the urgency, wherein it asserted that the issues at hand fell under economic management policy.
Therefore, it has been claimed by him that the state’s urgency were nothing but an attempt to mask its own failures.
The bench in the case observed and has directed the Centre for filing a reply on the interim relief application within a week and for a rejoinder to be filed within three days thereafter.
The court in the case observed that the original suit, challenging the Ministry of Finance’s directives and amendments to the Fiscal Responsibility and Budget Management Act, highlights the lowered borrowing limit imposed on the state, potentially precipitating a severe financial crisis.
Further, it has been contended by the Kerala Government that the state urgently requires around Rs 26,000 crore to meet its financial obligations.
As per the suit, the state’s exclusive authority to regulate its finances was being encroached upon by the Centre, leading to substantial arrears in welfare schemes and other commitments.
Therefore, the Pinarayi Vijayan-led government has underscored the imperative for the state to exercise its constitutional rights to borrow in alignment with its budgetary requirements, essential for the progress, prosperity, and development of the state.
Accordingly, the court listed the matter for further consideration on February 13, 2024.