New Delhi: Supreme Court judge Justice Surya Kant on Wednesday said the entire world is recognising that India has a very robust economy and the strong pillars on which the economy is surviving and thriving, and it is something to be proud of.
Justice Kant said on judicial platforms when Judges’ go outside the country even there, "We find this kind of feel is there. It is not based on perception; it is based on correct action figures.....".
A bench led by Justice Kant and comprising Justice K V Viswanathan was hearing an original suit filed by the Kerala government under Article 131 of the Constitution through its Chief Secretary alleging that the Union government has "taken control over its budgeting process" through executive actions. The Kerala government alleged that the Union is interfering with its power to borrow and regulate its own finances.
Attorney General (AG) R Venkataramani and Additional Solicitor General (ASG) N Venkataraman represented the Centre and senior advocate Kapil Sibal represented the Kerala government.
During the hearing, Justice Kant read one of the conditions put forward by the Centre. "One condition was that the demand can be considered only after the disposal or withdrawal of the suit. We are saying, for the time being, you can insist on acceptance of other conditions...but what we only want to suggest, you don't insist on the condition of withdrawal of the suit. Rest of the conditions, we understand your concerns…", said the bench.
The bench said to bail out the Kerala government from the crisis which they perceive, all other conditions the Union is entitled to insist on except the condition of withdrawal of the suit. Justice Viswanathan asked the Centre's counsel, "Can you tell this to a litigant? To not file a suit. It is a constitutional right under Article 131."
The AG said that the issue was a matter of financial prudence and was beyond judicial adjudication, and added that the state has to first establish prima facie that it has the right to judicially challenge the Union's decisions, which is based on a fiscal policy.
The AG argued that the court is being called upon to endorse those assumptions at this stage and "that is why we said to examine the issue within the parameters of financial prudence, which is outside the courts. You can't have it two ways". Justice Vishwanathan emphasised, "It is right under Article 131".
Sibal contended that the amount of Rs 13,608 crores was in any case within the entitlement of the state and was not a concession by the Centre and the state is facing a great financial crisis and is not in a position to pay off dearness allowances, and added that even if the Rs 13,608 crores is allowed, it can only meet the needs of seven days. Sibal stressed the need for additional borrowing.
The top court asked counsel for Kerala and the Centre to hold a meeting to resolve the issues. The bench said that the normal position would be to take what is offered and then come back with an application that "this what has happened and you are not even taking what is (being offered)….".
Sibal said I am ready to take Rs 13,000 crore and I need another Rs 15,000 crore, in addition to my existing entitlement. Like power reforms, Rs 5,000 crore and every state has got it and they are not giving to Kerala, he added.
The bench said as regards to the additional demand by Kerala, let there be a meeting held today in the afternoon or maybe tomorrow and Kerala will present its case and if the Centre finds some additional amount can be released, and that could be subject to terms and conditions.
AG said, "You (Kerala) have filed a suit therefore it would be continued to be used as a platform to have these issues incrementally sorted out, and you will say this year is past and next year there will be some problem…”.
Justice Kant, in a lighter vein, said we do not perceive a rosy picture next year. AG said: "There should be some kind of regulation…. You cannot say I am free-wheeling, debt and borrowing and then I do not probably look at the national scene", and claim that the central government is reckless, therefore the state government can also borrow recklessly.
ASG submitted that in the meeting (attended by Centre and Kerala government representatives) they pitched for Rs 28,000 crore and "if we start giving consent based on the needs, there is no end to it under the constitutional scheme. That is precisely where we are approaching. These are my needs you should give consent….either you consent for whatever I (state) ask, or you do not have consent…".
The bench told Centre’s counsel that the Union is the body and all states are its part, and when one of the parts is suffering the Union may try to cure it. ASG said what will happen to the gross at the national level. "Not only can you cure that part of your body. You can make sure that infection does not travel to other parts of the body…”, said the bench.
ASG said from the 9.4 per cent fiscal deficit during the Covid-19 pandemic, "now we have come to 5.8 per cent and now we are heading for 5.1 per cent. Our fiscal deficit is on deep decline…."
Sibal said there is Rs eight lakh crore of over-borrowing. ASG replied in contrast to G7, we are a better nation in terms of economic status and every expert is confirming that India is far superior than G7 nations.
"Mr Venkataraman, the entire world is recognising that India has a very robust economy, there is no doubt about it. On judicial platforms, when we go outside the country even there, we find this kind of feel is there. It is not based on perception; it is based on correct action figures and the strong pillars on which the economy is surviving and thriving both. It is something to be proud of….”, said Justice Kant.
After a detailed hearing, the bench said that senior officers from the Centre and from the Kerala government should meet to sort out the issue. The apex court granted liberty to the Kerala government to mention the matter and in the meanwhile, the officers can have a discussion on the issue.
