Centre tells Supreme Court it is open to dialogue with Kerala to resolve dispute over cap on net borrowing

The Centre told the Supreme Court on Tuesday it is open to discussion and dialogue with the Kerala government to resolve the dispute over a ceiling on net borrowing by the state. Attorney General R Venkataramani told a bench of Justices Surya Kant and K V Viswanathan that the Union of India is agreeable to holding a meeting with Kerala on the issue.

Earlier in the day, the top court had asked Venkataramani to seek instructions if the finance secretary of the state can meet the union finance minister and resolve the issue through negotiation.

"The suggestion falling from the court has received highest regard that it deserves. The government is open to a meeting. Let's keep it open without any conditions," Venkataramani said.


The Kerala government has approached the Supreme Court accusing the Centre of interfering in the exercise of its "exclusive, autonomous and plenary powers" to regulate the state's finances by imposing a ceiling on net borrowing.

In an original suit filed under Article 131, the Kerala government has said the Constitution bestows fiscal autonomy upon states to regulate their finances under various articles, and the borrowing limits or the extent of such borrowings are regulated by a state legislation.