New Delhi: The Supreme Court has directed Kerala’s petition regarding borrowing limits to be reviewed by a five-judge constitution bench. A two-member bench comprising Justices Surya Kant and KV Viswanathan made the referral. The constitution bench will assess the permissible borrowing amounts for each state. Additionally, the Supreme Court has explicitly stated that Kerala is not authorized to exceed its borrowing limit.
Kerala had sought permission to borrow an additional Rs 10,000 crores. The court initially instructed both the Centre and Kerala to resolve the matter through discussion. However, when no resolution was reached, the court revisited the case.
It was emphasized by the court that if Kerala surpasses the borrowing limit, the Centre has the authority to deduct from the state’s allocation for the following year. Previous discussions between Kerala and the Centre had resulted in the Centre expressing readiness to allocate Rs 13,600 crores to Kerala.
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