On February 15, the Centre had made a request to the Kerala delegation led by finance minister K N Balagopal to withdraw the case it had filed against the Centre accusing it of undermining its fiscal autonomy. Now, four days later on Monday, the request has turned into a demand.
Finance minister K N Balagopal said that the Centre had set the withdrawal of the case as a precondition for releasing the Rs 12,000-odd crore Kerala would have received without any dispute. The Centre laid this demand before the Supreme Court on Monday.
"The Centre has told the SC that we have to withdraw the case for the funds to be released," the finance minister told reporters in Kollam on Monday.
He said Kerala's lawyer Kapil Sibal had told the SC that the Centre was placing restrictions on money that the state would have automatically received. Sibal told the SC that it was an injustice to say that Kerala had to withdraw its petition in the SC to secure even the money that was its rightful share. "This will affect Kerala's day-to-day functioning," the finance minister said. The case has now been posted for March 6.
On February 15, a delegation led by the finance minister had held talks with a central team led by Union finance secretary T V Somanathan. The minister had termed the meeting "disappointing". "There was no breakthrough," Balagopal said. He was also infuriated that the central team had asked him to first withdraw the petition filed against the Centre and then conduct negotiations.
It was on the recommendation of the Supreme Court on February 13 that the Kerala and Centre agreed to hold discussions on the state's charge that the Centre was encroaching into its fiscal space. Kerala has been consistently arguing that the unprecedented limits placed on borrowing was harming Kerala's fiscal management. The Centre, in turn, had said that Kerala was among the most financially unhealthy states.
