The Central Government can borrow within such limits, if any, as may be fixed by Parliament by law. The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits as may be so fixed. Similarly, the executive power of a State extends to borrowing within India upon the security of its Consolidated Fund within such limits as may from time to time be fixed by the State Legislature by law and to the giving of guarantees, within such limits as the State legislature may fix by law. The Central Government may make loans to any State, or give guarantees for loans raised by a State, within the amounts fixed by Parliament. A State may not raise any loan without Centre’s consent if there is still outstanding any part of a loan made by the Centre to the State, or in respect of which the Centre has given any guarantee.
Dr. Sanjay Kumar Pandey, Associate Professor & Director – CCJR, Unitedworld School of Law (UWSL)
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