Striving for Great Cooperation: Supreme Court Weighs in on Centre-State Funding Disputes

By manish198832 Apr8,2024

Striving for Great Cooperation

Striving-In recent deliberations, the Supreme Court of India underscored a pressing concern regarding the escalating trend of state governments resorting to legal recourse against the central government over funding issues. Emphasizing the need for collaboration rather than confrontation, the apex court urged both entities to work in tandem. This pivotal stance emerged during the hearing of a writ petition filed by the Karnataka government, seeking the release of drought relief funds.


Striving-The crux of Karnataka’s petition revolves around the alleged failure of the central government to provide financial aid amidst a severe drought affecting multiple districts. Asserting that the absence of disbursed funds infringed upon the fundamental rights of the populace, the state lamented its compelled recourse to judicial intervention. Moreover, Karnataka highlighted the prolonged inaction of the central government on a crucial report by an inter-ministerial team regarding the drought situation, exacerbating the crisis by withholding benefits from the National Disaster Response Fund (NDRF).

Striving-Representing the state, eminent lawyer Kapil Sibal underscored the statutory obligation of the central government to act promptly on the submitted report. In response, the central government, through Attorney General R Venkatramani and Solicitor General Tushar Mehta, questioned the timing of the petition, particularly amidst the imminent Lok Sabha elections. Additionally, it suggested that Karnataka should have pursued dialogue with Prime Minister Narendra Modi’s administration before resorting to legal avenues.

Striving-The judiciary, comprising Justice BR Gavai and Justice Sandeep Mehta, granted a two-week window for the central government to furnish its stance. However, the Karnataka case isn’t an isolated incident; it echoes a broader narrative of discord between the central government and various states, particularly in southern India, regarding fund allocation and tax devolution.

Striving-The clash over fund disbursement to southern states, whether for disaster relief or tax allotments, has assumed prominence in recent times. Notably, Tamil Nadu sought an ex-parte order mandating the release of ₹ 2,000 crore as interim relief for flood-affected regions, shortly before Karnataka’s petition. These legal battles mirror the broader discord that spilled over to parliamentary debates.

Striving-During a parliamentary session in February, Union Finance Minister Nirmala Sitharaman and Congress’ Adhir Ranjan Chowdhury engaged in a heated exchange over allegations of financial deprivation faced by non-BJP governed states. Sitharaman defended the government’s stance, citing adherence to Finance Commission recommendations regarding tax devolution.

The grievances of southern states, primarily Karnataka, Tamil Nadu, and Kerala, regarding alleged discrimination in federal fund allocation, found resonance in nationwide protests held in Delhi earlier in February. These demonstrations underscored the perceived disparities in fund allocation, especially concerning states governed by opposition parties.

In essence, the ongoing tussle between the central government and states underscores the intricacies of fiscal federalism in India. While the constitutional framework delineates the distribution of financial responsibilities between the centre and states, practical implications often give rise to disputes. At its core, the imperative lies in fostering cooperation and dialogue to address regional grievances and ensure equitable distribution of resources.

Moving forward, the Supreme Court’s plea for collaboration serves as a clarion call for both central and state governments to transcend adversarial approaches and embrace concerted efforts towards national development. In navigating the intricate landscape of federal fiscal relations, a spirit of mutual understanding and cooperation remains paramount to uphold the principles of democracy and inclusive governance.

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