38.6c New Delhi, India, Tuesday, April 23, 2024
Judiciary

Kerala govt moves SC claiming Centre interfering in its power to regulate finances

By LAWSTREET NEWS NETWORK      14 December, 2023 03:40 PM      0 Comments

NEW DELHI: The Kerala government has approached the Supreme Court against the Centre’s alleged interference with its power to borrow and regulate its own finances, contending that it has caused huge arrears by affecting welfare schemes for the poor and the vulnerable, amongst others.

In an original suit filed under Article 131 of the Constitution, the state government through its Chief Secretary alleged that the Union government has "taken control over its budgeting process" through executive actions.

The suit alleged that imposition of the borrowing ceiling put by the Union government has led to an accumulation of unpaid dues over the years and it could trigger a grave financial crisis.

The state government contended that imposition of a Net Borrowing Ceiling as deemed by the Union government limits borrowings from all sources including the open market and thus curtails the exclusive constitutional powers of the state.

The suit claimed that as on October 31, 2023, a sum of Rs 26,226 crores is imminently and urgently required in order for the government to avert the impending grave financial crisis that has been caused by the impugned orders.

The suit said that the ability to determine the borrowing of the State in order to balance the budget and make up the fiscal deficit is exclusively within the domain of the states.

The state government has challenged the directions issued by the Ministry of Finance in the letters written in March and August this year. The state government has also challenged the amendments to Section 4 of the Fiscal Responsibility and Budget Management Act, 2003 through the Finance Act, 2018.

"The suit deals with the executive power conferred on the plaintiff State under Article 293 of the Constitution of India to borrow on the security or guarantee of the Consolidated Fund of the State in alignment with the fiscal autonomy of the plaintiff State as guaranteed and enshrined in the Constitution," it contended.

The suit said that the defendant does not have the constitutional right or authority to issue directives to the state government under Article 293 of the Constitution which have the potential to damage the federal structure by transgressing upon the exclusive financial domains of the state.

The state government said it has suffered a cumulative expenditure loss or resource deficiency of Rs 1,07,513.09 crores over fiscal year 2016-2023 due to such actions of the central government and as a consequence, the state was not able to fulfil the commitment made in its annual budgets.

"The ability to determine the borrowing of the State in order to balance the budget and make up the Fiscal Deficit is exclusively within the domain of the States. If the State is not able to borrow to the extent required based on the budget of the State, the State would not be able to complete its State Plans for the particular financial year. Therefore, it is essential for the progress, prosperity and development of the State and the people of the State that the State is able to exercise its constitutional rights and its borrowings are not impeded in any manner," it said.

The State Government also contended the State is not able to fulfil the commitments in its Annual Budgets.

"This has resulted in huge arrears that the plaintiff State 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," it said.

The Kerala government also claimed the State has the exclusive power to regulate its finance through preparation and management of its Budget and Borrowings and the actions of the Defendant Union fall foul of, and violate the federal structure of the Constitution.

The amendment to the Fiscal Responsibility and Budget Management Act, 2003 (Act 39 of 2003) vide the amendment no. 13 of 2018, are "manifestly arbitrary, unreasonable, irrational, and violative of fundamental right of the plaintiff State under Article 14 as well as of Articles 73, 162, 199, 202, 246, 266, 281, 298 and 293 of the Constitution", it said.



Share this article:

About:

Explore Comprehensive Legal Reporting with LawStreet Journal: Your Go-To Source for Supreme Court an...Read more

Follow:
TwitterLinkedinInstagram


Leave a feedback about this
Related Posts
View All

SC Issues Notice to Centre on PIL by Ashwini Upadhyay to Debar Candidates From Contesting Polls on Framing of Charges  [Read Petition] SC Issues Notice to Centre on PIL by Ashwini Upadhyay to Debar Candidates From Contesting Polls on Framing of Charges [Read Petition]

A bench of Justices K M Joseph and Hrishikesh Roy sought a response from the Union government's Law and Justice and Home Ministries, and the Election Commission on plea by BJP leader and advocate Ashwini Kumar Upadhyay.

SC to take up PIL by Ashwini Upadhyay for publishing draft laws before hand to strengthen law making process SC to take up PIL by Ashwini Upadhyay for publishing draft laws before hand to strengthen law making process

The Supreme Court is set to take up on October 31 an important PIL by advocate Ashwini Kumar Upadhyay for a direction to the Centre and States to publish draft legislations 60 days before introducing those in Parliament and State Assemblies

Left well-settled job as engineer to pursue legal reforms, Ashwini K Upadhyay to SC Left well-settled job as engineer to pursue legal reforms, Ashwini K Upadhyay to SC

Upadhyay was arguing in person for his PIL seeking a direction to the Centre and States to constitute expert committees to examine good practices of the countries, ranked among top 20 in Corruption Perception Index.

Uniform laws on inheritance, maintenance, divorce in domain of Parliament: SC to Ashwini K Upadhyay Uniform laws on inheritance, maintenance, divorce in domain of Parliament: SC to Ashwini K Upadhyay

The Supreme Court on Friday orally observed that bringing uniform laws for inheritance, maintenance, divorce and guardianship fell in domain of Parliament.

TRENDING NEWS

a-critique-of-the-supreme-courts-adventurism-for-lgbtqia-rights
Trending Legal Insiders
Overreaching Jurisdiction: A critique of the Supreme Court's adventurism for LGBTQIA rights

In its over-enthusiasm to protect LGBTQIA+ rights, has the Supreme Court exceeded its constitutional mandate under Article 142? A Delhi University research scholar evaluates the theme.

22 April, 2024 10:48 AM
new-criminal-laws-watershed-moment-for-society-cji
Trending Legal Insiders
New criminal laws watershed moment for society: CJI [Read Inaugural Remarks]

CJI Chandrachud hails new criminal laws as a watershed moment, marking a significant overhaul for the justice system, emphasizing adaptation and technology's role.

22 April, 2024 11:26 AM

TOP STORIES

burden-to-prove-dishonest-damage-to-electric-meter-is-for-electricity-theft-is-on-the-prosecution-says-delhi-hc
Trending Judiciary
Burden to prove dishonest damage to electric meter is for electricity theft, is on the prosecution: Delhi HC [Read Judgment]

Delhi High Court has held that the burden to prove that a person has ‘dishonestly’ damaged an electric meter to commit electricity theft is on the prosecution.

17 April, 2024 05:41 PM
pil-filed-by-ashwini-kumar-upadhyay-in-sc-for-yr-bachelor-of-law-degree-after-class
Trending Judiciary
PIL filed by Ashwini Kumar Upadhyay in SC for 3-yr Bachelor of Law degree after Class XII

PIL by Ashwini Kumar in SC seeks to shorten law degree to 3 years post-Class XII, citing current 5-year span as irrational.

18 April, 2024 11:21 AM
centre-sets-up-high-powered-committee-to-suggest-measures-to-end-discrimination-against-queer-community
Trending Executive
Centre sets up high-powered committee to suggest measures to end discrimination against queer community [Read Order]

Centre forms committee to end discrimination against the queer community, chaired by the Cabinet Secretary, following a Supreme Court directive.

18 April, 2024 12:11 PM
after-karnataka-hc-delhi-hc-sets-aside-government-circular-banning-23-ferocious-dog-breeds
Trending Judiciary
After Karnataka HC, Delhi HC sets aside Government circular banning 23 'ferocious' dog breeds [Read Judgement]

After Karnataka High Court, the Delhi High Court has set aside a Government circular banning 23 'ferocious' dog breeds.

18 April, 2024 01:06 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email