Home The Constitution Part XII Article 293

Art. 293 Part XII: Finance, Property, Contracts and Suits

Borrowing by States

Exact text — Constitution of India

(1) Subject to the provisions of this article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State... (3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.

In Plain English

What this Article actually means

This Article gives states their own borrowing power, but with an important restriction the Union doesn't face: if a state owes any outstanding loan to (or has a Union-guaranteed loan connected to) the central government, it needs the Union's CONSENT before raising any further borrowing — giving the central government real leverage over indebted states' additional borrowing.

Why This Matters To You

How it shows up in everyday life

This is a significant, sometimes contentious feature of India's fiscal federalism — because most states have at some point borrowed from or through the central government, this consent requirement gives the Union real influence over state government borrowing decisions, a point of ongoing debate about genuine state fiscal autonomy.

Read alongside this one

Art. 292 — Borrowing by the Government of India

Frequently Asked

Quick answers about Article 293

Can a state simply borrow freely from international markets without Union involvement?

In practice, clause (3)'s consent requirement (triggered by any outstanding Union-connected debt, which is the case for most states) means significant state borrowing generally does require central government consent, constraining states' independent access to additional debt.

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The text above reproduces Article 293 of the Constitution of India as amended to date, for general educational reference. It is public-domain legislative text, but we recommend cross-checking the authoritative version at legislative.gov.in or india.gov.in before relying on it for a legal matter. The explanation, examples and FAQs are general information, not legal advice — consult a qualified advocate for guidance on your specific situation.