In a crucial development addressing Kerala’s escalating financial crisis, the Supreme Court has stepped in, urging the Central government to extend a special one-time bailout package to the state.
The call for intervention follows a plea filed by the Kerala government, which raised concerns over the undue interference of the Central government in the state’s autonomy to borrow and regulate its finances.
Supreme Court Urges Central Government to Save Kerala from Financial Crisis
The matter came under the spotlight during a hearing before a bench comprising Justices Surya Kant and KV Viswanathan. The bench emphasized the situation’s urgency and suggested that a particular package be provided to Kerala, albeit subject to stringent conditions.
Supreme Court asks Centre to give one time package to Kerala to bail out State from financial crisis
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“You can be slightly liberal and give a one-time package as a special case. And more rigid conditions in future budgets … Before March 31 give them the special package. But subject to harsher conditions than other States. For the existing States you will be liberal next time (perhaps),” remarked Justice Kant to counsel for the Central government.
Acknowledging its limited expertise in financial matters, the court encouraged the governments to collaborate and devise an interim solution to address Kerala’s economic predicament. The matter is set to be revisited, with officials from both the Central and State governments expected to convene for discussions ahead of the next hearing.
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Kerala Blames Central Government for Financial Crisis
The plea filed by the Kerala government stemmed from mounting concerns over the impact of the Central government’s restrictions on the state’s borrowing capacity. Kerala alleged that these constraints had led to a significant accumulation of unpaid dues, exacerbating the state’s financial woes and jeopardizing its ability to meet essential obligations, including employee salaries.
During the proceedings, Senior Advocate Kapil Sibal, representing the State of Kerala, pressed for the immediate release of ₹19,000 crore owed by the Centre to Kerala. However, the Additional Solicitor General (ASG) emphasized the challenges faced by the Union government, stating that Kerala’s situation did not warrant special treatment. “Theirs is not a special case … We have declined to other states. They do not even budget expenditures. 15 times more bailout sought than expenditure package,” stressed the ASG.
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In response to the plea, the bench urged the parties to explore an interim solution while deliberating on a long-term resolution. The court proposed that a particular concession be granted to Kerala by the Central government, acknowledging the pressing need for immediate financial relief.
The Supreme Court’s intervention underscores the gravity of Kerala’s financial crisis and the imperative for swift action to mitigate its repercussions. As stakeholders engage in deliberations to chart a course forward, all eyes remain on the Central government’s response and the potential implications for Kerala’s economic stability and welfare.
