SC decision a relief for State: Minister

Kerala will continue its legal battle for fiscal federalism in apex court, says Balagopal adding SC decision augurs well for the State. He says the court has upheld the democratic right of individuals and entities to approach court for relief

Finance Minister K.N. Balagopal has hailed the Supreme Court decision allowing the State to borrow ₹13,600 crore to clear “unmet arrears and immediate obligations” despite the Central government’s strident objection as a massive relief for the State.

Mr. Balagopal said on Wednesday that Kerala had sought the Centre’s permission to borrow ₹26,000 crore. The Supreme Court rejected the Centre’s objections and allowed the State to borrow ₹13,600 crore in four instalments. The State would continue its legal battle for “fiscal federalism” in the apex court, he said adding the Supreme Court decision “portended well” for the State.

Verdict hailed

Moreover, Mr. Balagopal said the apex court had upheld the “inalienable and democratic right” of individuals and entities, including States, to approach the court for relief. The Centre had pressed the State to drop the litigation as a precondition for negotiations. It had contended that litigation and parleying could not march in lockstep, the Minister said.

“The Supreme Court has reaffirmed that nobody can limit the fundamental right of individuals and entities to seek legal recourse in courts of law,” he said.

Mr. Balagopal pointedly refrained from infusing politics into the CentreState dispute.

He said the apex court had counselled that political commentary should not imperil the ongoing CentreState talks.

Mr. Balagopal said the court’s decision had come as a significant relief for the

State. “It’s the FebruaryMarch quarter and we still face a fund shortage. The Supreme Court has removed a hurdle that impeded fiscal federalism,” Mr. Balagopal said.

He said the fiscal crunch had not constrained the disbursal of salaries and pensions. Mr. Balagopal denied that any limit was set on withdrawal from the State’s treasuries. However, he conceded that there was a limited delay in salary disbursal due to “a few technical glitches.”

Kerala had moved the Supreme Court in 2023 accusing the Centre of imposing a “financial embargo” on the State.

Moral victory: Isaac

Former Finance Minister T.M. Thomas Isaac and Communist Party of India (Marxist) candidate from the Pathanamthitta Lok Sabha constituency too hailed the Supreme Court decision as “a moral victory” for the Left Democratic Front government. The apex court’s finding that there was merit in Kerala’s struggle for fiscal federalism had dealt a body blow to the “CongressBJP combine’s false propaganda,” he said.