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Chaitra Navratri

Ceiling on net borrowing: SC refers Kerala govt's suit to five-judge Constitution bench


NEW DELHI: The Supreme Court's two-judge bench on Monday in its order referred to a five judge constitution bench to adjudicate Kerala government's plea challenging the Centre's decision to put cap on the borrowing capacity of states. 

A two-judge bench of the top court, headed by Justice Surya Kant, comprising Justice K V Viswanathan, refused to pass any interim order and or direction on the plea of Kerala government's plea.

It noted in its order that that state received grant of Rs 13608 crore from Centre after filing of the present petition.

The apex court in its order said it prima facie held that once a state over borrows from centre there can be reduction in the next payouts by the Union of India and that balance of convenience lies with the Union of India.

The talks had been failed between Kerala and Centre, forcing the apex court to pass  the order on the state's plea seeking appropriate directions and or orders on the issue. 

The Kerala government, in its petition filed in the Top Court, has alleged that the Centre is unnecessarily interfering in State's finances and said that due to such interference, the state is not able to fulfil the commitments in its Annual Budgets.

Kerala government in its petition said that the Centre is imposing a Net Borrowing Ceiling on the State.

It said that due to the alleged interference by the Centre, this has resulted in huge arrears that it owes by way of welfare schemes to the people of the State particularly the poor and the vulnerable, various beneficiary groups, the employees of the State Government, its pensioners and dues to its State-Owned Enterprises.


11 Days ago