"Let There Not Be Contest": Supreme Court On Centre, State Funds Row

The Supreme Court on Monday expressed concern over recent instances in which state governments had approached it seeking directions against the centre, and called on both sides to cooperate rather than compete. "Let there not be a contest between the union and states," the court said as it heard a writ petition by Karnataka government for release of drought relief funds.

The petition claims the centre has not extended financial assistance to the Karnataka government in view of a drought in multiple districts, and that it has been constrained to move the court since the failure to disburse funds had violated the fundamental rights of the people of the southern state.

The state also argued the centre had not yet acted on an inter-ministerial team's report on the drought-related disaster for nearly six months (it was filed October), and that the situation has been aggravated because of "withholding of NDRF (National Disaster Response Fund) benefits".

Appearing for the state government, senior advocate Kapil Sibal pointed out the centre had been required to act on the report within a month of its submission.

In its response, the centre questioned the timing - with a Lok Sabha election in 11 days - and said the state ought to have approached Prime Minister Narendra Modi's government before the top court.

READ | Karnataka Moves Supreme Court Over Funds For Drought Relief

A bench of Justice BR Gavai and Justice Sandeep Mehta gave Attorney General R Venkatramani and Solicitor General Tushar Mehta, appearing for the centre, two weeks to seek instructions.

Centre vs states row have made headlines before the Lok Sabha election, particularly with southern states - Karnataka, Tamil Nadu, and Kerala - challenging the centre over disbursal of funds and devolution of taxes. The Karnataka petition came days after Tamil Nadu sought an ex-parte order to the centre to release Rs 2,000 crore as part of an interim relief package for flood-ravaged districts.

READ | In New Centre-States Row, Tamil Nadu Moves Court For Flood Aid

The fight over the release of funds to the southern states - whether for disaster relief or as part of dues from tax devolution - also made its way to the Parliament in February, where Union Finance Minister Nirmala Sitharaman and the Congress' Adhir Ranjan Chowdhury sparred over the allegations that non-BJP state governments are "deprived of (financial) dues" and allocations.

READ | On GST Dues Row, Nirmala Sitharaman Slams Adhir Ranjan

An incensed Ms Sitharaman hit back, saying "devolution of taxes (i.e., sharing of funds between centre and states)... happens as per Finance Commission recommendation".

In February the three southern states took to the streets - in Delhi - to knock on the doors of the centre alleging discrimination in the federal funds allocated to states, particularly non-BJP ruled ones.

From the administrative side, Finance Secretary TV Somanathan told NDTV that financial allocations to states are based on uniform guidelines that leave no room for discrimination.

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