Consider ‘one-time package’ for Kerala, Supreme Court suggests Centre

After the Kerala government filed a suit against the Centre over borrowing limit cap, the Supreme Court last week called upon both sides to sort out their differences over financial issues.

The bench had said on March 6 that fiscal mismanagement by states is an issue the Union government has to be concerned about as it impacts the nation's economy. (Express photo)

The Supreme Court Tuesday asked the Centre to consider allowing the Kerala government a “one-time package” in the present financial year to help it tide over funds shortage while the central government could simultaneously impose more stringent conditions for the next financial year.

After the Kerala government filed a suit against the Centre over borrowing limit cap, the Supreme Court last week called upon both sides to sort out their differences over financial issues.

On Tuesday, senior advocate Kapil Sibal, appearing for the Kerala government, informed the bench of Justices Surya Kant and K V Viswanathan that there has been no headway in the negotiations as the Centre declined its demand for sanction to borrow an additional Rs 19,351 crore.

Story continues below this ad

Decode Politics | Kerala’s financial crisis and why it has gone to SC against Centre

Justice Kant told Attorney General R Venkataramani and Additional Solicitor General N Venkataraman, who appeared for the Centre, “What we are trying to impress upon you is, do something as a special measure.”

The ASG conveyed that the Centre has already declined a demand of Rs 25,000 crore by another state. Justice Kant said the Centre could try to be “slightly liberal” in the case.

Also Read | Sort out differences on financial issues, SC tells Kerala and Centre

“Find a way out… what you can do is …as of now, before March 31, you can be slightly liberal in relaxing your certain norms as a one-time package as a special case, subject to more rigid conditions the next financial year.”

Don't Miss | Centre must be concerned with fiscal mismanagement of states as it impacts nation’s economy: SC

However, the ASG said, “What will happen is that some states come to the court and get this. Some other States agree on our decline letter. So we will be divided into states which come to court and which don’t. These are the problems which the Union will face”.

Story continues below this ad

Justice Kant remarked, “Let the experts explore. What they can do is, whatever you can say before 31st March, you can defer it by the first quarter of the next year…”

The ASG agreed to consider the court’s suggestion and get back Wednesday.

Stay updated with the latest - Click here to follow us on Instagram