Kerala Governor Arif Mohammed Khan has sought a report on a petition seeking Presidential imposition of a financial emergency in the state under Article 360(1) of the Constitution, in view of the acute financial crisis being faced by the state.

Social activist RS Sasikumar, in his petition to the Governor, had sought the President’s intervention to “save Kerala from irredeemable financial instability precipitated by the state government’s reckless borrowing, lax tax administration, and unpardonable profligacy”.

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Sasikumar pointed out that the financial position of the state as of now is precarious and beyond redemption as the state has exceeded its borrowing power.

The payments are due to government contractors, the state-owned SUPPLYCO which does market intervention, college and university teachers as UGC pay revision arrears, DA arrears to state government employees, and the state-owned Kerala State Road Transport Corporation employees, the petition says.

“The state of Kerala is going through this grave fiscal crisis because of the extravaganza of the ministers and complete lack of planning. Inefficient fiscal management and utter failure in revenue mobilization emptied the state treasury,” said Sasikumar in his petition.

“Unless remedial measures are taken, the future of the State will suffer which cannot be remedied through short-visioned schemes. If it is allowed to continue, redemption may not be possible. As such, Your Excellency is requested to recommend a proclamation as provided under Article 360(1) of the Constitution of India, in the larger interest of the people of the state,” the petition said.

“Any delay in making a declaration under Article 360(1) of the Constitution is likely to lead to a situation where the helpless common man will be led to committing crimes even for their survival. As such, your Excellency has a constitutional obligation to safeguard the interest of the citizens by making appropriate recommendations to the President of India,” Sasikumar’s petition said.

The Governor’s move to seek an explanation from the government on the petition from Sasikumar has put the LDF government in a fix. Since the Governor has sought an explanation from the chief secretary, it is clear that he is considering the matter seriously.

The petition seeking the financial emergency in the state and the Governor’s action in seeking a report on it from the government came at a time when the political wrangling over Kerala’s finances has reached its peak. The Congress and the BJP have held the government responsible for the state’s acute financial crisis.

Although it may be argued that certain Central policies are the reason for the current economic crisis in the state, the affidavit filed by the chief secretary in the  Kerala High Court shows the gravity of the financial crisis that the state is facing now. This also makes it difficult to convince the Governor that there is no need to declare a financial emergency in the state.

Kerala Chief Secretary V Venu last month candidly submitted to the Kerala High Court that the state government is going through a severe financial crisis and finding it difficult to garner resources for day-to-day affairs. The Chief Secretary made the statement when a contempt of court petition filed by retired KSRTC pensioners for not implementing the court directive to pay pensions in time came up for hearing.

In the recent past, no Governor in the country has made such a move. Realising the danger this could bring, the CPI-M has come forward with a political defence.

The government has also countered the move by accusing the Central government of imposing a politically motivated financial embargo on Kerala to choke the state’s development.

CPI-M state secretary MV Govindan on Friday took strong exception to Mr. Khan’s alleged bid to hold the state to ransom “by threatening to misuse his power to advocate for the declaration of a State of financial emergency in Kerala”.

MV Govindan accused Governor Khan of threatening to employ a rarely used constitutional provision to give political cover to the Centre, which he accused of attempting to run Kerala to financial ruin.

He said the Centre had withheld Kerala’s GST compensation and whittled Kerala’s share of the revenue deficit grant. It slashed the state’s allocation from the divisive pool. The BJP government hauled down Kerala’s borrowing limit to stymie the state’s development, he added

The CPI-M state secretary said his party would muster people to resist Governor Khan’s alleged trespasses on fiscal federalism. He also said the CPI-M would marshal students, teachers, and parents to resist the Governor’s attempt to stack state-funded university senates with Sangh Parivar nominees.