Kerala Financial Crisis: Rejects Centre's Rs 5000 Crore Offer; Demands Rs 10000 Crore


(MENAFN- AsiaNet News) New Delhi: Kerala rejected the central government's special package of Rs 5000 crore as a one-time measure directed by the Supreme Court on Tuesday. The central government articulated its stance in the Supreme Court, suggesting a disbursement of Rs 5000 crores to Kerala this month, with a corresponding reduction from next year's allocation. Additionally, the Center urged Kerala to devise its strategies to address the financial challenges.

However, Kerala insisted on an immediate payment of Rs. 10,000 crore, contending that the Center's approach would impinge on Kerala's borrowing rights. In response, the court asked whether Kerala should accept the Rs 5000 crore offer extended by the Center. The court stated that it would be heard as the first case. Kapil Sibal, standing for Kerala, told the court that an additional Rs 15,000 would be required this month to resolve the situation.

In the previous hearing, the Court had urged the Union government to permit additional borrowing of Rs. 13,608 crores without requiring the state to withdraw the suit filed in the Supreme Court. Kerala initiated the original suit against the centre under Article 131 of the Constitution, challenging its norms on borrowing limits. The Court had previously recommended talks between the state and the centre to seek a resolution.

Kerala, in its petition, stated that the state is reeling under a severe financial crisis and that there is a shortage of funds to disburse pensions, dearness allowance, benefits, etc. There is a situation of overdraft. Kerala also informed that they only have money to pay salaries. The court emphasized the importance of addressing Kerala's financial crisis, affirming the right of individuals to petition for solutions.

The Supreme Court had previously urged the involved parties to resolve the matter through amicable discussions, acknowledging the court's limitations in financial affairs. Despite the Centre's offer to allow Kerala to borrow Rs 13,608 crore if the state withdrew its petition, Kerala remained steadfast in its demand for what it believes it rightfully deserves, expressing its intent to continue its legal pursuit.

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