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Supreme Court of India | File Photo: Comyan
New Delhi: New Delhi: The Supreme Court on Monday dismissed the Kerala Government’s demand for an emergency additional loan of Rs 10,000 crores.
The court referred to a five-judge Constitution bench the suit filed by the Kerala Government raising the issue of ceiling on net borrowing.
A bench of Justices Surya Kant and K V Viswanathan passed the order on the State's suit, 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 bench referred to Article 293 of the Constitution, which deals with borrowing by States, and said this provision has not been so far subject to any authoritative interpretation by the apex court.
In an original suit filed under Article 131 of the Constitution, the Kerala Government has said the Constitution bestows fiscal autonomy upon States to regulate their finances under various articles, and the borrowing limits or the extent of such borrowings are regulated by State legislation.
Article 131 of the Constitution deals with the original jurisdiction of the apex court in any dispute between the Centre and States.
The 15th Finance Commission cut short the net borrowing limit of Kerala, citing funds that were allotted to the State by the previous Finance Commission. The State moved the SC against the decision. Now, Kerala has yet again requested for an emergency loan, but the appeal was declined by the court.
While considering the petition, the SC noted that following its intervention, a much required loan of Rs 13,608 crores was allotted to Kerala in the previous financial year. The court stated that in case the State continues to borrow more money like this, then prima facie it felt that the Centre should be lowering the net borrowing limit. (with inputs from PTI)
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