kerala-govt-constitutes-4-member-team-to-discuss-state-s-financial-woes-with-centre

Hours after the Centre on Tuesday told the Supreme Court that it was open to discussions with Kerala to resolve the dispute over the state’s financial problems, the ruling Left government constituted a four-member team to hold talks, official sources said.

 

The development came after the top court asked the Attorney General to seek instructions if the finance secretary of the state can meet the union finance minister and resolve the issue through negotiation.

 

Subsequently, Attorney General R Venkataramani told the apex court that the Union of India is agreeable to holding a meeting with Kerala on the issue.

 

Kerala then informed the central government that it is ready to hold talks to work out a solution as proposed by the Supreme Court and that a four-member delegation will participate in the discussions on behalf of the state, official sources said in the evening.

 

The four-member team would be headed by state Finance Minister KN Balagopal and will also include KM Abraham, the Chief Principal Secretary to the Chief Minister, Principal Secretary, Finance Rabindra Kumar Aggarwal and Advocate General K Gopalakrishna Kurup, the sources said.

 

Earlier in the day, during the hearing of the matter in the apex court, both sides expressed their agreement to the court’s suggestion that they explore the possibilities of Kerala and the Centre finding a solution to the state’s financial issues, including the alleged cutting down of its borrowing limit.

 

The state government sources said the top court’s suggestion to hold a discussion indicates that the issues raised by Kerala were seriously considered by the Supreme Court.

 

Initially, the central government completely opposed Kerala’s plea in the Supreme Court and alleged that the state’s mismanagement and unnecessary expenses were the cause of the financial crisis.

 

However, as the issues raised by Kerala started to be accepted by other states, the Attorney General informed the court that it was a policy matter of the central government and not a matter to be resolved in court, the sources said.

 

Despite that, the Supreme Court emphasized the need to seek redress through discussion, the sources said.

 

The Kerala government has approached the Supreme Court accusing the Centre of interfering in the exercise of its “exclusive, autonomous and plenary powers” to regulate the state’s finances by imposing a ceiling on net borrowing.

 

In a note submitted before the top court, the Centre had said uncontrolled borrowing by states would affect the credit rating of the whole country, and that the fiscal edifice of Kerala has been diagnosed with “several cracks”.