New Delhi: The Centre informed the Supreme Court on Tuesday of its willingness to engage in discussions with the Kerala government regarding financial matters. Attorney General R Venkatramani conveyed to the bench, comprising justices Surya Kant and KV Vishwanathan, that the Union Government is receptive to a meeting with the Kerala Government.

AG Venkatramani further mentioned that this decision was made after considering the court's suggestions regarding the potential meeting between the Centre and the state government. Senior Advocate Kapil Sibal, representing the Kerala Government, informed the court that a delegation from Kerala could arrive the next day, suggesting the meeting take place on Wednesday. Sibal also explained that the state's finance minister was unable to attend due to budget commitments, to which AG assured to facilitate the meeting.

The court instructed both the Centre and the State governments to identify discussion topics among themselves and scheduled further hearing on the matter for the following week.

In an affidavit, the Kerala Government asserted that the Central Government is responsible for approximately 60 per cent of the total debt or outstanding liabilities of India. The state contended that the Centre's attempts to control Kerala's borrowings were unfounded and exaggerated.

The Attorney General submitted a note to the Supreme Court stating that Kerala's financial condition and debt situation have been flagged by successive Finance Commissions and the Comptroller and Auditor General (CAG), characterizing it as one of the most financially unhealthy states.

Responding to Kerala's claims, the Centre countered in its affidavit, highlighting Kerala's financial challenges and asserting that the state's fiscal structure has significant weaknesses.

The Attorney General also filed a written note in response to Kerala's petition, emphasizing that states' debts affect the country's credit rating. The note addressed Kerala's concerns regarding alleged interference by the Centre in the state's financial autonomy, citing amendments to the Fiscal Responsibility and Budget Management Act and imposition of borrowing ceilings.

In its petition, the Kerala government argued that the Centre's actions, including imposing borrowing ceilings, infringed upon the state's fiscal autonomy guaranteed by the Constitution.

The lawsuit filed by Kerala contends that the Centre's imposition of borrowing limits hampers the state's ability to fulfill its budgetary commitments, thereby challenging its fiscal autonomy.

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