SC Declines Interim Relief To Kerala In Suit On Borrowing Limits

The Supreme Court of India today declined to provide interim relief to Kerala in its lawsuit against the Union of India regarding borrowing limits.

Bench comprising Justice Surya Kant and Justice KV Viswanathan acknowledged the constitutional significance of the case and referred it to a Constitution Bench of five judges under Article 145(3). The issues raised included the interpretation of Articles 131 and 293, questioning whether states have enforceable borrowing rights and the extent of Union regulation. 

The Court leaned towards the Union's argument on fiscal discipline and balanced convenience in the matter of interim relief. Despite previous negotiations and proposals, the impasse led to the Court's intervention and the reserved order on March 22. This legal conflict stemmed from Kerala's concerns over reduced borrowing capacity, emphasising its impact on vital welfare programs and budget commitments, while the Union defended its actions as necessary for macroeconomic stability.

Source: Live Law