Articles 292 and 293 of the Constitution of India: Borrowing by the Government of India and States
Articles 292 and 293 form Chapter II, "Borrowing", in Part XII of the Constitution of India. They distribute constitutional authority over borrowing by the Union and the States and regulate guarantees and, in specified circumstances, the need for Government of India consent to State borrowing.
Updated: 19 September 2026
Article 292 - Borrowing by the Government of India
Meaning and scope: Article 292 authorises the executive power of the Union to borrow on the security of the Consolidated Fund of India. Parliament may prescribe borrowing limits by law. The Article also permits the Union to give guarantees, subject to limits fixed by Parliament by law, if any.
Text of Article 292
The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.
Key elements of Article 292
The constitutional authority is vested in the Union executive. Borrowing is secured upon the Consolidated Fund of India, while Parliament retains the constitutional power to fix limits by law. The same Article also addresses Union guarantees.
Article 293 - Borrowing by States
Meaning and scope: Article 293 governs the borrowing power of State Governments. Clause (1) confines State borrowing under the Article to borrowing within the territory of India on the security of the Consolidated Fund of the State, subject to limits fixed by the State Legislature by law, if any. It also permits State guarantees within such limits.
Text of Article 293
Clause (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 by law and to the giving of guarantees within such limits, if any, as may be so fixed.
Clause (2): The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.
Clause (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.
Clause (4): A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.
Clause-by-clause explanation of Article 293
Article 293(1): A State may borrow within India on the security of its Consolidated Fund. Its Legislature may prescribe borrowing and guarantee limits by law.
Article 293(2): The Government of India may make loans to States, subject to conditions laid down by or under Parliamentary law. It may also guarantee State loans so long as the applicable Article 292 limits are not exceeded. Sums required for such Central loans are charged on the Consolidated Fund of India.
Article 293(3): Where a qualifying loan or guarantee described in this clause remains outstanding, the State cannot raise another loan without the consent of the Government of India.
Article 293(4): The Government of India may attach conditions when granting consent under Article 293(3).
How Articles 292 and 293 differ
Article 292 concerns the Union's borrowing and guarantee power, backed by the Consolidated Fund of India. Article 293 concerns State borrowing and guarantees, backed by the Consolidated Fund of the State, and additionally regulates loans and guarantees from the Government of India to States. A significant constitutional feature is Article 293(3), under which Central consent is required when the specified outstanding Central loan or guarantee exists.
Current legal and fiscal framework
The constitutional provisions operate alongside fiscal and public debt legislation and government borrowing arrangements. The Department of Economic Affairs explains that the Fiscal Responsibility and Budget Management framework regulates important aspects of Central fiscal management, debt and guarantees. Government securities are also governed by the Government Securities Act, 2006 and related rules.
For the authoritative constitutional text, see the Legislative Department - Constitution of India. For government debt and borrowing materials, see the Department of Economic Affairs and India Code.
Related provisions
Articles 292 and 293 follow the miscellaneous financial provisions in Part XII and precede the constitutional provisions dealing with succession to property, assets, rights, liabilities and obligations. The related internal links in the sidebar provide access to nearby constitutional provisions.