Kerala government and Central government on March 6 agreed to hold another round of dialogue over the issue of funds allocation upon being urged to do so by the Supreme Court.
The court told Kerala to accept the Rs 13,608 crore that the Central government is offering it and make a case for further allocation. The court also asked the Union government not to ask Kerala to withdraw its suit as a pre-condition as the state has the right to pursue legal recourses.
A bench led by Justice Surya Kant asked the Kerala government and Centre to hold talks and suggested that all responsible officials from both the Centre and Kerala meet at North block and deliberate on this issue further.
The case has now been adjourned without a next date for hearing. Kerala and Centre can, however, mention the case for hearing if the negotiations fail.
During the course of the hearing, the apex court questioned Kerala as to why it was pleading that there was an emergency fiscal situation without accepting what the Union was offering. Thus, Supreme Court urged Kerala to accept the money being offered by the Union government, hold further negotiations and then pursue litigation, if needed.
The court also asked Union government as to why it asked Kerala to withdraw the suit to hold further negotiations on the issue.
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Senior advocate Kapil Sibal, who appeared for Kerala, told the apex court that the state were ready to accept the funds the Centre was offering. Attorney general Venkatramani and additional solicitor general Venkatraman, who appeared for the Centre, told the court that they were also open for negotiations. Sibal argued that while the centre was offering Rs. 13,608 crore, the state was entitled to Rs. 15,000 crore more.
On February 13, the SC was informed by the Centre that it is willing to engage in a dialogue with the representatives from Kerala government on funds allocation. The top court, accordingly, deferred the hearing by a week to make way for the dialogue.
However, these negotiations did not yield any results as the Centre and Kerala decided to pursue the litigation in court. Centre told the court that it had offered the state a borrowing space of Rs 13,608.57 crore, if Kerala withdrew the plea. However, Kerala refused to take the offer and decided to continue with the litigation.
The above transpired in a plea filed by the Kerala government at the Supreme Court, asking it to intervene in the dispute. The Left government in Kerala, which has been blaming the Centre for the state's financial woes, had in its Budget attacked the Union government stating that it was pushing the southern state towards the worst financial crisis in its history.
Attorney General Venkatramani, in his written note to the Supreme Court contended that Kerala is one of the most financially unhealthy states in the country. He further alleged that Kerala's public finance management is a national issue.
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