The State of Kerala on Thursday thanked the Union government for ₹13,000 crore, but said it will continue with its legal battle in the Supreme Court for an additional amount to which it is entitled.
“I am very thankful that ₹13,000 crore has come to us. But we are talking about an additional amount to which we are entitled,” senior advocate Kapil Sibal, appearing for the State, submitted before a Bench of Justices Surya Kant and K.V. Viswanathan.
Opening his submissions in a suit filed against the Union government for unduly interfering and placing limits on Kerala’s borrowing powers, Mr. Sibal said the State immediately needed a little over ₹10,000 crore more.
The State had sought a total of about ₹24,000 crore before March 31 to tide over a looming financial emergency. The focus of the hearing on March 21 was Kerala’s push for some interim relief.
Kerala had earlier accused the Centre of trying to nudge it to withdraw the suit in return for financial help. The State said its demands for financial leeway and help was well within the framework drawn by the Constitution and the Finance Commission.
Mr. Sibal said the Centre had “put a spin” on the demands made by the State, portraying it as a “delinquent” that splurged its funds.
The senior lawyer said history showed how during the years of the command economy, before free markets took over, the Centre would give 98% money to the States.
“Today, our borrowings have come down to 2.84%. This is translated into ₹12,000 crore when our State budget is ₹1.8 lakh crore… I have genuine payments… Pension, salaries, etc,” Mr. Sibal said.
He said 63% of the State’s earnings go to the Union government.
Additional Solicitor General N. Venkataraman argued that Kerala had a long history of fiscal deficit, by which its expenditure was in far excess of its income
The Centre had accused Kerala of being “one of the most financially unhealthy States”.
A note submitted by the Attorney General in the apex court had said the “fiscal edifice of Kerala has been diagnosed with several cracks”.
The Centre had said Kerala’s poor financial indicators pointed to a “lack of proper management of its public finances”. The note had highlighted that debts run by States affect the credit rating of the whole country.
