The Supreme Court on Monday referred to a Constitution Bench the question raised by Kerala whether a State has an “enforceable right” to raise its borrowing limits from the Union government and other sources.
The court wants a five-judge Bench to decide important questions of law, including whether “fiscal decentralisation” was an aspect of Indian federalism and if Central regulations fixing net borrowing ceilings on States were a violation of the principles of federalism.
The court raised the issue if financial restrictions introduced by the Centre had meted out a differential treatment to Kerala compared to other States.
