New Delhi: The Supreme Court on Friday reserved its order on a plea filed by the Kerala government seeking interim relief in a lawsuit contesting a ceiling on the state's net borrowing.
After a detailed hearing in the matter, a bench of Justices Surya Kant and K V Viswanathan reserved the order. Senior advocate Kapil Sibal represented the Kerala government and Attorney General R Venkataramani and Additional Solicitor General (ASG) N Venkataraman represented the Centre.
The Kerala government has filed a suit in the top 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 cap on borrowing.
The Centre had argued before the apex court that the Kerala government has been "over-borrowing" in recent years, which reflected its difficult financial situation. However, the state government emphasised that its finances are "sustainable enough" to bear the burden of over-borrowing in the previous years.
On March 12, the Supreme Court had asked the Centre to be slightly liberal and consider providing a one-time package to Kerala, to rescue the state from its current financial crisis. The next day, the Centre told the top court that it was willing to allow the Kerala government to borrow Rs 5,000 crore, subject to certain conditions, to deal with the financial issues facing the state as a "very special and exceptional measure".
However, the Kerala government turned down this offer saying that it does not take it anywhere. The state government stressed that the absolute minimum requirement stood at Rs 10,000 crore.
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