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Kerala Kaumudi Online
Saturday, 20 April 2024 7.11 AM IST

Financial situation: Centre is insulting Kerala by hiding truth; Kerala in Supreme Court

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NEW DELHI: The state government countered in the Supreme Court that the central allocation to Kerala has been reduced for the last three decades and the centre is concealing this fact and blaming poor financial management as the reason for the economic crisis.

The petition filed by Kerala against the restriction on borrowing limit will be considered next Tuesday. Chief Secretary Dr V Venu submitted a reply to the central arguments through government advocate CK Shashi before this.

Attorney General R Venkataramani's is wordy and misleading. A different strategy is adopted from other states due to the scarcity of land for industries. Human resource capacity investment focusing on education, health and welfare is happening. An attempt is being made to give a bad picture of Kerala without understanding this.

Kerala's debt is 1.70-1.75 percent from 2019 to 2023. Therefore, the claim that Kerala's borrowing will destabilize the economy is an exaggeration. Public debt and fiscal discipline are national matters and have no power to encroach upon the legislative and executive powers of the State. States and Centre have independent powers over their public debt.

Kerala lost 1.07 lakh crores from 2017 to 2024. The reply alleged that the Centre is following an unfair political strategy to push Kerala into financial crisis and treasury failure in the context of the Lok Sabha elections.

Kerala has also submitted a list of its achievements in various fields.

60% of the country's debt is borne by the Centre

  • The Centre owns 60 percent of the country's total debt and outstanding liabilities. Only the remaining 40 percent is shared by all the states
  • The financial management of the country has been performing poorly for a decade. This is evident in the figures of the International Monetary Fund
  • A bad credit rating of the Centre in the global market will also affect the rating of the state. An example of this is KIIFB's rating
  • India is a country whose debt is higher than GDP. According to rating agency Moody's, the financial position of the Centre is weak

What Kerala pointed out

  1. Central justification on borrowing control is irrational
  2. There is no definite answer to the issues raised by Kerala
  3. There is no room for undue interference in constitutional matters
  4. Insulting the financial management of Kerala
  5. Encroachment on state powers in finance
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