NEW DELHI: The Kerala Government on Wednesday knocked on the doors of the Supreme Court challenging the Union's alleged interference in the state’s finances and sought appropriate directions or orders from it to the Centre on the issue.
In the petition, the Kerala govt referred to the executive power conferred to the State, under Article 293 of the Constitution of India, to borrow on the security or guarantee of the Consolidated Fund of the State in alignment with the fiscal autonomy of the State as guaranteed in the Constitution.
In the petition, a copy accessed by this Newspaper filed before the Top Court, Kerala Govt said that the Union of India (UOI), through the Ministry of Finance, issued Letters in March 2023 and by amendments made to Section 4 of the Fiscal Responsibility and Budget Management Act seeks to interfere with the finances of the State.
Sources in the Supreme Court registry and lawyers connected to the case, although tight-lipped about the case, thought that the case would likely come up for hearing next year in January, as the SC's winter vacation starts on December 16 (Saturday) and the reopening would be on January 02 (Tuesday) next year.
The Centre did so, by imposing a net Borrowing Ceiling on the State in the manner deemed fit by the Union, which limits borrowings from all sources including open market borrowings, the Kerala govt alleged in its petition filed before the Apex Court.
It further said that the UOI reduced the Net Borrowing Ceiling by including aspects into the “borrowing” of the State which, otherwise, are not “borrowings” as contemplated under Article 293 of the Constitution”.
Article 293 said that a State may not, without the consent of the Government of India, raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India.
The plea of Kerala govt sought urgent and immediate intervention from the Apex Court. It said that the Plaintiff (Kerala State) will incur financial loss that will cause severe damage to the economy of a small state like Kerala.
"If the damage is not prevented, the Kerala state, with its meagre resources, will not be able to recover from this for decades," the plea of the Kerala govt said.
It also said that the State has an excellent prima facie case considering the unequivocal provisions in the Constitution. The balance of convenience is also in favour of the State in terms of the irreparable injury that has been demonstrated in the event.