Borrowing limit discussion with Centre: Kerala panel led by FM Balagopal formed

THIRUVANANTHAPURAM: A committee headed by Minister KN Balagopal has been formed to discuss the issue of borrowing limit with the Centre. The discussion is scheduled for 4 pm on February 15. Apart from the Finance Minister, Chief Principal Secretary to Chief Minister KM Abraham, Principal Secretary of Finance Rabindra Kumar Agarwal and Adv General K Gopalakrishna Kurup are in the team.

The Kerala committee was formed for the discussion after the Supreme Court directed that the Centre and the Kerala Government hold talks on the petition filed by the state government regarding the reduction of the borrowing limit.

The group will discuss matters including borrowing limits. In the morning, when Kerala's petition was considered, the Supreme Court asked about taking an amicable approach. Kerala and the Centre had informed that they agree to the Supreme Court's proposal to hold a discussion. Following this, the Supreme Court suggested that the Kerala Finance Minister and the Union Finance Secretary should hold a discussion.

Kerala has also sought permission to borrow urgently to solve the financial crisis. The central government's contention is that the financial crisis is due to the failure of Kerala's financial management and the petition should be dismissed. The AG has submitted a detailed note and the finance ministry has submitted an affidavit in this regard. The Centre has also sought three weeks' time to submit its reply to Kerala's affidavit. Kerala's allegation is that the Centre has encroached on the state's financial autonomy.