The Aryavarth Express
Agency (Kerala): Cash-strapped Kerala scored a significant legal-political victory when the Supreme Court directed the Union Government to allow the State additional market borrowing to the tune of Rs 13,608 crore. The apex court’s ruling has come as a big relief for Kerala, which has been struggling to meet its financial commitments, including payment of salaries and pensions. To the acute embarrassment of the Union Government, the SC also came down heavily on the Centre’s insistence that Kerala withdraw the case before the Centre released the funds, which are the State’s legitimate dues.
“Let the Chief Secretary, Finance Secretary and the State Advocate-General meet the central team. Take Rs 13,608 crore. Make out a case for the remaining amount. Accept the conditions, except withdrawal of this suit filed in the Supreme Court, to resolve the immediate financial emergency,” the Justice Surya Kant-led Bench, comprising Justice K V Viswanathan, orally advised the State government.
The state was represented by advocates Kapil Sibal and C K Sasi. The court, however, did not pass an interim order on the original suit. It granted liberty to the state to mention whenever there was a need for a hearing. The apex court also did not fix a time-frame for the meeting between the Union Government and Kerala. It has left that to the discretion of the officials on both sides.
The suit filed by the State had accused the union Government of violating the federal structure of governance and causing “severe damage” to the economy of a small state with meager resources by limiting its borrowing powers. The State finds itself on the brink of a financial emergency as a result of the arbitrary restrictions imposed by the Union Government.
Arguing Kerala’s case, Kapil Sibal said the State was not in a position to pay out public funds. Nor was the State in a position to pay pension, dearness allowance and implement pay revision. The overdraft position is very critical, Sibal said, adding that if they lost another two Tuesdays, they will not get the money from the Reserve Bank of India. The state cannot do any market borrowing at this time. This is a serious issue, Kapil argued.
Needless to say, the apex court’s ruling is a big political-legal victory for Kerala, which had accused the Union Government of playing politics on the issue with the parliamentary elections just months away. The Kerala Government had been constrained to launch a massive campaign entitled ‘Nava Kerala Sadas’ to highlight the Union Government’s virtual imposition of a financial embargo on the State.
The sanction of Rs 13, 608 crore will not, however, mark the end of the State’s financial problems. Kerala will need to borrow another Rs 50,000 crore before it can breathe easy financially. The Bench also asked both the parties to refrain from making public comments on the issue, which is sub-judice.
Welcoming the order, Kerala’s Finance Minister K N Balagopal said the Supreme Court had upheld the “inalienable and democratic right of individuals and entities, including States, to approach the court for relief. The court had also said that nobody can limit the fundamental right of individuals and entities to seek legal recourse in courts of law.
The verdict represents a severe snub to the opposition parties in Kerala which had refused to join hands with the LDF Government to fight unitedly for the State’s rights and interests. The apex court had administered a telling body blow to the false propaganda unleashed by the Congress-led United Democratic Front (UDF) and the BJP-RSS combine. The judgment will also embolden other Opposition-ruled state governments similarly circumstanced to seek legal remedy.
The latest on the issue is that the talks both sides held following the SC verdict have failed to achieve a breakthrough. The talks did not make any headway because of the refusal of the Union Government to concede Kerala’s demand that it be allowed to make more borrowings. In other words, the Union Government’s mulishly obstinate attitude will leave Kerala with no other option but to return to the highest court in the country for speedy justice. (IPA Service)
By P. Sreekumaran
