Fiscal federalism: No breakthrough in talks with Centre, says Kerala FM

Kerala Finance Minister KN Balagopal on Thursday said there was no "breakthrough" in the meeting between the state officials and Centre over the issues of fiscal federalism.

A four-member group, headed by Balagopal, held a meeting with central government officials, including the Union Finance Secretary.

The Kerala government has approached the Supreme Court, accusing the Centre of interfering in the exercise of its "exclusive, autonomous and plenary powers" to regulate the state's finances by imposing a ceiling on net borrowing.

"There was no positive outcome at today's meeting... there was no breakthrough. We submitted the most feasible options (to the Centre)," Balagopal said at a press briefing in the national capital.

The meeting was convened after the Centre on February 13 told the apex court that it is open to discussions with Kerala to resolve the dispute.

Apart from Balagopal, other members of the group are Chief Principal Secretary to the Chief Minister KM Abraham, Finance Principal Secretary Rabindra Kumar Aggarwal and Advocate General K Gopalakrishna Kurup.

At the briefing, Balagopal said the case is about fiscal federalism and the main issues were not resolved at today's meeting.

"The discussions were not successful," he said.

In the original suit filed under Article 131, the Kerala government said the Constitution bestows fiscal autonomy upon states to regulate their finances under various articles, and the borrowing limits are regulated by state legislation.

Under Article 131, the Supreme Court has the right to settle disputes between the Centre and states or between states.

The ruling Left Democratic Front (LDF) in Kerala has been raising concerns over the BJP-led central government's approach towards states.

On February 8, leaders and lawmakers from the LDF, led by Chief Minister Pinarayi Vijayan, staged a protest against the Union government in the national capital.

Vijayan has accused the central government of not giving states their due share of taxes, and using governors in opposition-ruled states to disrupt the functioning of the governments.