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Centre's economic blockade

Centres economic blockade

The Supreme Court has kept on hold for detailed hearing the petition by Kerala government seeking quashing of the decision of the Centre setting limits on Kerala's borrowing. The Centre's stand on the issue right from the beginning can only be termed as stifling the stte. Further, the Cente's position can also be seen as a clear interference in the powers of the state. Earlier, Kerala had approached the Supreme Court following its refusal to accept the amount of RS 13,608 as loan. At that the Centre took the stand that the matter could be discussed once the case is withdrawn. Kerala, which didn't budge on that, proceeded with the litigation, which made the Centre submit to the court's will. Subsequently, when the state sought a borrowing limit of Rs 19,352, agin the Centre stuck to its negative response. The Centre even turned its back on the Supreme Court's suggestion that Kerala may be granted a special package in view of its financial crisis. It showed mercy to grant just Rs 5,000, that too with stringent conditions. What the Modi government has suggested is a condition that funds could be granted if particulars of how income and expenditure are balanced. With only days left for the end of the financial year, the state is in urgent need of a minimum of Rs 20,000 crore.

The central government is apparently suffocating the state deliberately at this stage of uncertainty. This is nothing but political vendetta. Kerala is currently going through the worst economic crisis in its history. This issue was discussed in detail in the Legislative Assembly during the last budget session. As the opposition often alleges, the state government's mismanagement of finances has fueled the financial crisis, but no one can doubt that the real villain is the centre's flawed approach. The mechanisms including GST implemented in the name of economic reforms have affected opposition states like Kerala the most. Kerala is in a crisis with no money even for daily expenses as the Centre has flouted all federal principles by not allowing loans, withholding the tax share due legally and fairly, and not allowing GST compensation arrears. For the first time in history, things have come to such a pass that the government could not even pay salaries to its employees in time. Although the February salary has been paid in full, the restrictions for their withdrawal have not been lifted completely. Along with this, there is undeclared treasury control. This happened only because the state was not allowed the tax share and loan that it was justly entitled to. Even as of now, out of the Rs 13,608 crore sanctioned under the intervention of the Supreme Court, only Rs 5,000 crore has been received so far. On the one hand, the granted amount is withheld, and on the other, non-payment of the sanctioned amount creates uncertainties. In this context, Kerala's legal battle has great relevance.

In the recent budget speech, Finance Minister K.N. Balagopal had revealed in his budget speech that the government has a Plan B for the economic survival of the state. One of the conditions the Centre raised for allocating the funds was that it should explain what this 'Plan B' is. This can be considered as an indication to what extent a government is going through fascist tendencies. The first point to ponder is why a state government under a federal set-up has to contemplate a Plan B. Ever since the Modi government came to power in 2014, states including Kerala were left out of almost all the schemes launched by the Centre and . it can be said that the central share is absolutely nominal. It is in this situation that Kerala had to rely on mechanisms like KIIFB to borrow outside the budget. Denying the rightful share citing technical and legal problems in these measures – which were adopted for survival - means harming even the last resort in steps for survival of the citizens of the land. Perhaps there can be criticism about the state government's financial management`. But it has to be recognised that this does not amount to the reactionary politics of the Centre which even denies the right to survival. Therefore, champions of democracy have an obligation to be in solidarity with a legal battle when it is going on in the highest court, that should be won. Ultimately it is also a fight to preserve federalism.

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TAGS:KIIFBEditorialKerala economic crisisCentre's borrowing limits
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