The Supreme Court on January 12 agreed to examine an original suit filed by Kerala alleging that the Centre was violating the federal structure of governance and causing “severe damage to the economy of a small State with meagre resources” by interfering with the finances of the State.
A Bench headed Justice Surya Kant issued summons to the Union of India through the Attorney-General. It listed Kerala’s application for interim reliefs, which include an injunction order to restrain the Centre from curtailing the State from borrowing ₹26,226 crore to clear “unmet arrears and immediate obligations”, on January 25.
The original suit said a State, in a federal system of governance, has the exclusive power to regulate its finance through preparation and management of its budget and borrowings.
