Kerala Finance Minister Criticizes Centre’s ‘Conditional’ Nod to Borrow Money, Calls it Highly Disappointing

Kerala Finance Minister KN Balagopal has expressed strong dissatisfaction with the Centre’s decision to grant permission for the state to borrow money under the condition that it withdraws the case before the Supreme Court. Terming this stance as “highly disappointing” and detrimental to fiscal federalism, Balagopal criticized the Centre for linking the borrowing permission to the withdrawal of the petition.

Balagopal highlighted that the state government filed the case in the Supreme Court to claim funds rightfully belonging to Kerala. He emphasized that the Union government’s position would negatively impact the fiscal federalism of the state and its day-to-day activities.

During a meeting on February 15 in the national capital, convened after a suggestion from the Supreme Court, the Kerala government accused the Centre of interfering in its autonomous powers to regulate the state’s finances. The court, on Monday, indicated that it may not provide an interim order in favor of Kerala in the ongoing dispute over borrowing limits imposed by the Centre.

Lawyer Kapil Sibal, representing Kerala, stated that the state’s claim is over Rs 24,000 crore, while its entitlement is Rs 11,000 crore. However, the Centre insisted on the withdrawal of the suit before considering permission for borrowing. The court directed the matter to be listed on March 6, urging both parties to keep negotiation channels open to resolve the financial dispute.