NEW DELHI: Kerala has informed the Supreme Court that it is striving to overcome its financial crisis without conflicting with the central government. This statement was made during the hearing regarding Kerala's request for a loan approval of at least 10,000 crores before March 31. Additionally, Kerala alleged that the central government is attempting to assert control over the state's financial sector.

Meanwhile, Additional Solicitor General N. Venkataraman, representing the Central Government, countered by stating that Kerala has been borrowing excessively for several years. The hearing, which began yesterday, was not concluded and is set to resume today at 1 o'clock.

As the Supreme Court is closed today for the Holi holiday, it is indicated that the interim order will be issued today. However, the Center is opposing this, and the court will reconvene on April 1.

Kerala asserted that borrowing from the Center has reduced from 98 percent to 2.9 percent since liberalization. They argue for borrowing internally and state that it is not constitutionally permissible for it to be regulated. Furthermore, Kerala clarified that the GST compensation of Rs 14,000 crore cannot be included in the debt limit.

Additional Solicitor General contended that it is incorrect for Kerala to claim that it has been granted additional borrowing for eight years and is now taking a negative stance. Permission has been requested for borrowing beyond the limit set by central guidelines, which has been denied 14 times.

Kerala's arguments

1. Revenue income has increased by 23%. However, the Center perceives it as a negative rate.

2. The state should be allowed room to manage its finances, or it will face difficulties.

3. Kerala seeks permission to borrow the eligible amount as recommended by the 15th Finance Commission.

Center's arguments

1. A CAG report indicates that Kerala has failed to manage its economy effectively.

2. Kerala has not fulfilled its responsibilities under the Financial Responsibility Act.

3. Expenditure exceeds income, which is an unfavourable indicator. Kerala is also struggling to repay loans.