Unleashing a full-scale attack for “squeezing” Kerala financially through alleged unconstitutional and illegal means, Chief Minister Pinarayi Vijayan has termed the State Government’s decision to approach the Supreme Court against the Union Government “a historic fight” to preserve federalism.
Addressing the media at Kuravilangad in Kottayam district on December 14 (Thursday) in connection with the ongoing Navakerala Sadas, Mr. Vijayan said the Centre’s “discriminatory and vindictive actions” on the financial front were aimed at throwing Kerala into dire straits. The petition (in Supreme Court), according to him, seeks to restore the “Constitutional rights of State Governments.”
“The key aspects highlighted in the petition are the unconstitutional interference by the Centre in the State’s financial affairs, the unconstitutional cuts to eligible borrowing limits and inclusion of the State’s public account liabilities and borrowings by State-owned enterprises in the borrowing limit etc., among other things,” he said.
The plea also seeks to prohibit the Central measures that encroach upon the States’ Constitutional prerogatives by the exercise of powers not contained in the Constitution, said Mr. Vijayan.
GST compensation
Attributing the current financial squeeze experienced by Kerala to a failure by the Centre to provide GST compensation and the reduction in revenue deficit grant, Mr. Vijayan said that though Kerala had tried to overcome this by increasing tax and non-tax revenue and prioritising expenditure, the economic impact was more than what the State could bear.
“The Centre, which imposes strict borrowing limits on the States, does not do it for itself. While using the public account uncontrollably to deal with fiscal deficit, it is not letting the States to do so in a reasonable manner,” pointed out Mr. Vijayan.
Response to Governor
He also urged Governor Arif Mohammed Khan, who has sought a report on a demand to impose financial emergency in Kerala, to seek an explanation from the Centre instead. But since the Governor has sought a report, the government will be responding to the same.
“We are working on how to prepare the response. What I suggest, however, is that the Governor should first examine the veracity of every petitions he receives, instead of forwarding these to us straight away for an explanation,” he added.
Kerala, according to Mr. Vijayan, urgently needs ₹26,226 crore to ease the “crisis caused by the Central measures.”
“It will not be enough to overcome the crisis. It is estimated that the loss due to the Central measures will be between ₹2 lakh crore and ₹3 lakh crore in the next five years. This will be 20% to 30% of the State’s GDP over a five-year period. If unchecked, it will push the State, which thrives on a very limited set of resources, to a crisis from which it may not be able to recover even after decades,” he added.
Mr. Vijayan also called upon the Opposition and the Kerala society to stand with the State government in this “decisive battle.”
To a query, the Chief Minister responded that the State would be making no cuts in the salaries of government employees.
