Finance talk between Centre and state; homework should be done before discussion

The discussion that will be held in Delhi today between Kerala and the Centre is an indication that the protest that took place in Delhi on February 8th under the leadership of Chief Minister Pinarayi Vijayan has begun to bear fruit. The team, headed by state finance minister KN Balagopal, will include the chief principal secretary to the chief minister, the principal secretary of the finance department and the advocate general. It is not known whether Union Finance Minister Nirmala Sitharaman will participate in the discussion. It is certain that the Centre will be represented by top officials of the Finance Department. It was the Supreme Court's intervention that led to such a discussion.

The state is of the view that the main reason for the extreme economic crisis that Kerala is currently facing is due to the central restrictions. The restriction imposed by the Centre on borrowing is a severe blow to the financial condition of the state. Similarly, the loans of KIIFB and the pension company were included in the state's credit limit. The newly introduced restrictions put the state in a literal financial bind. This led to huge arrears in all sectors. Many welfare schemes of the government have been affected by the financial crisis. Kerala had filed a petition in the Supreme Court against the Centre's financial control, which was not in line with federalism. Last day, while considering the petition, the question was raised by the court whether the issue could be solved amicably through discussions between the finance departments of the state and the centre.

Both sides deserve to be praised for choosing the path of cooperation and understanding rather than using the economic crisis as a weapon. The Centre is of the stand that there has been no reduction in the allocation to the state but the state's objection against the centre is that not only has the loan limit been cut down significantly, but also many deserving allocations have been stopped. Kerala has approached the Supreme Court seeking a stay on the orders related to cutting the loan limit. In response to this, the Centre told the court that the crisis was caused by Kerala's failure to manage its finances and not the non-disbursement of funds. This dispute did not start today or yesterday. Evaluating the progress achieved by Kerala in many fields, central assistance to the said sectors has been stopped or drastically reduced.

Let's not forget the reality that the state's suffocating financial controls are effectively affecting the people directly. It is the duty of the Centre to come to the rescue of the states that are facing financial difficulties. The Union Finance Department should come forward for today's bilateral talks keeping this fact in mind. Similarly, Kerala should also do its homework in advance to convince the state's side clearly. The state is not going to benefit from continuing disputes and controversies. The Supreme Court is also waiting to know the outcome of the discussion along with the people of the state. The petition will be heard by the court on the 19th. If a positive decision is made before that, it will benefit the state and the people.