Thiruvananthapuram : The cabinet meeting on Tuesday decided to submit petition to Prime Minister on standing financial issues between the Centre and State. The petition will cite happenings in departure with Constitutional provisions and important Central - State financial issues.
The petition will urge the Central government to reinstate the State’s borrowing limit to pre-2017 levels and also bring to the attention of the Prime Minister, important issues faced by the State as a result of occurrences that run against the federal principles.
In 2017, the Centre had decided to set the State’s borrowing limit after also taking into account balances set aside against public debt. That was a misinterpretation of Article 293(3). As per the said section, the government will consider loans repaid by State PSUs and special-purpose entities or tax/levy or any such State levy that forms part of State revenue will be considered as State debt, while issuing consent letter for borrowing under Article 293(3).
On the other hand, this rule does not apply to loans taken by Central PSUs and similar establishments. This double standards is a violation of federal principles and seriously impeded development in State.
It is against this backdrop, that the Centre would be urged to review the decision and include all balances set aside by the State as just that including loans taken by State controlled institutions, while setting of State’s borrowing limit.
