Centre allows Kerala to borrow additional Rs 13,600 cr amid financial crisis

The Centre has allowed Kerala to borrow an additional Rs 13,600 cr amid the financial crisis. The Kerala has accepted the Centre's offer, however the state said that it will require more Rs 15,000 crores.

New Delhi: In a major relief to Kerala the Centre has allowed the state to borrow an additional Rs 13,600 cr amid the financial crisis. Senior advocate Kapil Sibal who appeared for Kerala in the Supreme Court said that the fund allowed by the Centre is acceptable to Kerala, however, Rs 15,000 crore more would be needed. The court directed the Centre and Kerala to discuss the remaining amount. The Centre requested the Supreme Court not to interfere in the borrowing limit. The court stated that it would take time to settle all the demands in Kerala's petition. 

The central government clarified that the fiscal deficit of Kerala and the Centre cannot be compared.

Kerala in its petition stated that the state is reeling under a severe financial crisis and that there is a shortage of funds to disburse pension, dearness allowance, benefits, etc. There is a situation of overdraft. Kerala also informed that they only have money to pay salaries. The court emphasized the importance of addressing Kerala's financial crisis, affirming the right of individuals to petition for solutions.

The Supreme Court had previously urged the involved parties to resolve the matter through amicable discussions, acknowledging the court's limitations in financial affairs. Despite the Centre's offer to allow Kerala to borrow Rs 13,608 crores if the state withdrew its petition, Kerala remained steadfast in its demand for what it believes it rightfully deserves, expressing its intent to continue its legal pursuit.