Borrowing limit: Temporary relief for Kerala; should consider special package, says Supreme Court

NEW DELHI: The Supreme Court has backed Kerala on the issue regarding the state's borrowing limit. The Supreme Court asked the Centre to consider a one-time special package. The court, which asked whether there was any obstacle in granting exemption in special circumstances, also asked the central government to inform the decision tomorrow.

Kerala had earlier held talks with the Centre to increase its borrowing limit. Later, it informed the apex court that this discussion had failed. Kapil Sibal, who appeared for the state, told the court that during the discussion held on Friday, the Union Finance Ministry rejected the state's request to allow it to borrow another Rs 19,351 crore. Meanwhile, the central government has informed the Supreme Court that it will pay Rs 5,000 crore on April 1.

Kerala had filed a petition in the Supreme Court seeking the removal of restrictions on borrowing limits. The petition also demanded the apex court to put an end to central interference that undermines the federal system. Kerala is the first state to approach the Supreme Court with this demand.