A state finance minister can borrow a limited amounts from Government of India if the following conditions a state may qualify to meet:
- Parliamentary approval:
- A loan by Government of India to any state is only subject to such conditions, from time to time, as Parliament may determine.
- No pending loans:
- There is no outstanding loan or guarantee to that state from the center.
- Central consent:
- Without the central consent, the center cannot raise fresh loans. While giving such consent, center can impose conditions on it.
- Constitutional Provisions:
- Article 293 deals with borrowing power of states and center:
- Article 292, no money can be borrowed by the center without anticipation of any issuing out of the Consolidated Fund of India.
- If a state has any outstanding loans or guarantees from the center, such state cannot borrow except with the center’s consent.
