Kerala Finance Minister KN Balagopal slammed the Centre on Monday for its decision to permit the state to borrow money only if it withdrew the case before the Supreme Court. Stating that the stand was detrimental to fiscal federalism, Balagopal termed it as "highly disappointing".
Addressing the press in Kollam, Balagopal asserted that the Central government notified the Supreme Court that upon Kerala's withdrawal of its petition, the state would promptly receive authorization from the government to borrow approximately Rs 12,000 crore on Monday itself.
"The state government has filed the case in the Supreme Court for the fund which is rightfully ours," he said adding, "The Union government's stand is highly disappointing and will affect the fiscal federalism of the state and the day-to-day activities of the state government."
"The plea was made by our lawyer Kapil Sibal, who argued on our behalf, emphasizing our rightful claim to the funds. Our petition is grounded in our constitutional rights. Their demand for withdrawal amounts to injustice," stated the minister, as per PTI.
On February 15, a meeting took place in the national capital after the Supreme Court's recommendation during a hearing of the petition filed by the Kerala government accusing the Centre of intruding upon the state's "exclusive, autonomous, and plenary powers" to regulate its finances by imposing a borrowing limit.
On Monday, the apex court cautioned the Kerala government to prepare itself mentally as it may not be in a position to grant an interim order favoring its plea alleging the Centre's interference in the state's finances by imposing borrowing restrictions.
Additionally, the court instructed the matter to be scheduled for March 6 and urged both the Kerala and Union governments to maintain open channels of negotiation to resolve the dispute.
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