Centre is attempting to control our financial affairs, Kerala government tells Supreme Court

The Kerala government on Thursday told the Supreme Court that the Centre was attempting to control its financial affairs and acting like an “executive”, Live Law reported.

The Centre, in response, alleged that the state government had misrepresented financial figures and consistently overborrowed in recent years.

A bench of Justices Surya Kant and KV Viswanathan was hearing a petition filed in December by the Kerala government that challenged the Centre’s decision to limit the additional money the state can borrow, saying that it violated the principles of fiscal federalism.

The Communist Party of India (Marxist)-led state government had said in its plea that lowering the borrowing limit can potentially lead to a “grave financial crisis”.

On Thursday, senior advocate Kapil Sibal, representing the Kerala government, said that the state’s borrowings from the Centre had reduced from 98% to 2.9% post liberalisation. He said the state government had adhered to fiscal norms, adding that the Centre was acting as an “executive” and attempting to manage its financial affairs.

Citing constitutional provisions, Sibal said: “Each state is entitled to devise for itself what its programme should be, what its Budget should be, how much should it spend, and how much should it borrow.”

The advocate said that Kerala’s borrowing was within fiscal deficit limits. He added that the restrictions...

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