Tamil Nadu Chief Minister Stalin extends his support to the Kerala government for the case in the Supreme Court against the Union government’s interference in the financial management of the state governments.
Kerala approached Supreme Court
The Union government headed by Prime Minister Narendra Modi limits the borrowing capacity of the states in 2023. This makes the state government to face huge financial shortfall in their commitments in the annual budget. So Kerala government moved to Supreme Court on 13 December, 2023 against the Union government alleging that the Union government is squeezing the fiscal federalism of the states.
Regarding this the Union government submitted a note to the Supreme Court on 4 February, that the financial shortfall is only due to inefficient administration in the Kerala government. This triggered the Kerala government and the Chief Minister Pinarayi Vijayan announced a protest in Parliament permises. He also seeks support from the state Chief Ministers to participate in the protest.
TN extends support to Kerala
In this regard, Tamil Nadu Chief Minister M.K. Stalin has written a letter to Chief Minister Pinarayi Vijayan that the Tamil Nadu government will give full its full support to Kerala in preserving fiscal federalism.
In the letter to Pinarayi vijayan, M.K Stalin mentioned that, Tamil Nadu will extend its full support to Kerala government for appealing the Supreme Court against the Union government which is suppressing the states by exercising arbitrary and discriminatory control over the financial management of the state governments.
As per constitution, the Public debt for financing the public expenditure of the States is under the exclusive jurisdiction of the State Legislature. However, the Union government has been abusing its power to limit the borrowing opportunities of states.
Impact of this debt restriction in TN
Such actions by the Union government have resulted in a significant setback in raising funds for the initiatives of the Tamil Nadu government. He also listed out a few instances including, The Union government fixed the state’s GDP growth at 8% for calculating the net debt ceiling in 2023-24. But Tamil Nadu has consistently achieved 15% growth in the last 2 years. Due to this TN faces a loss of Rs, 6000 crore in the current financial year.
There was also a deliberate delay in approving the Phase 2 works of the Chennai Metro Rail project. Thus, the total debt of Rs.33,594 crore for the scheme is included in the net debt ceiling of the state. Compared to the pre-GST period, the Tamil Nadu government is facing a revenue shortfall of Rs 20,000 crore per year. The Union government is also refusing to extend the compensation for the scheme.
Protest in parliament premises
Because of this dissatisfaction of the TN government with the Union government, DMK MP’s decided to join hands with Kerala government in the protest on 8 February. Regarding this Chief Minister Stalin shared in his social media post that DMK will extends its full support and participate in the protest to be held by the Kerala Cabinet in Delhi on February 8 (tomorrow), wearing a black shirt in the Parliament premises. He said that the rights of states will definitely be upheld in all sections including finance and administration.
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