The Supreme Court on Tuesday asked the Centre to consider giving a one-time package to the Kerala government for the current financial year before March 31, 2024 to deal with financial issues facing the state.
Senior Advocate Kapil Sibal appearing for Kerala mentioned the pending lawsuit against the Centre for an urgent hearing in the top court saying that the Centra government was not releasing necessary funds.
A bench of Justice Surya Kant and KV Viswanathan heard the case and asked Centre to file its response to its suggestion for allowing a one-time package as a special case to Kerala. However, the bench reiterated that the Centre may put more rigid conditions may be put in future budgets and, in the meantime, a special package be given to the state before March 31.
Additional Solicitor General N Venkataraman, appearing for the Centre, told the top court that the government is really constrained.
"We are really constrained and our hands are tied." ASG told the bench.
He said that the offsetting balance has a cumulative effect on Kerala's finances. He further told the court that Kerala has deferred fiscal consolidation twice.
ALSO READ | Underwear Tampering Case: SC Asks Kerala Govt If It's Hand-In-Glove With Accused MLA
Last week, the bench said that Centre should be concerned with fiscal mismanagement by states as it impacts the country's economy.
The court had asked Centre and Kerala to iron out their differences on a cap on net borrowings by the state.
Kerala moved the top court under Article 131, accusing the Centre of interfering with its powers to regulate the state's finances by imposing a ceiling on borrowing. However, the Centre has said that unregulated borrowings by states would affect the credit rating of the entire country.