The restrictions imposed under Article 293 of the Constitution on State borrowing powers, though constitutionally valid, may hinder fiscal autonomy of States and disrupt cooperative federalism. Discuss in the light of recent developments. (Answer in 250 words)
Introduction
15 words
Main Body
Kerala government has critiqued central government for restricting its power to borrow under Article 293.
Restrictions imposed under Article 293:
States need Central approval for borrowing if it already has debt taken from the latter.
States can't borrow directly from foreign sources, rather can do so via Centre
Impact of such restrictions:
(I) Positives:
by deterring extravagant expenditure.
However, these restrictions have time and again caused cooperative disruption.
(II) Challenges:
Maintaining fiscal health is the prime responsibility of any government, however some special fiscal autonomy based on performance can be the way forward
— Ananya Rana · AIR 60
Conclusion
23 words
- Clear case study example with Kerala
- Distinguishes between different types of borrowing restrictions
- Identifies both positive and negative impacts
- Balanced presentation of positive and negative impacts
- References constitutional provisions appropriately
- Clear identification of federalism principles
- Provides concrete examples from multiple states (Kerala, Tamil Nadu)
- Connects to ground realities with health epidemics and public agitations
- Suggests pragmatic solution with performance-based autonomy
- Strong concluding argument
Ananya Rana
Federal Structure
Centre-State Financial Relations
Article 293 and State Borrowing Powers
266
Total words
6
Paragraphs
analytical
Tone