Consider the following statements with respect to the Borrowing by the Centre and the States 1 The C...........

Indian Polity Centre - State Relations

Consider the following statements with respect to the Borrowing by the Centre and the States

1. The Central government can borrow either within India or outside upon the security of the Consolidated Fund of India but within the limits fixed by the Parliament.

2. A State government can borrow from India and abroad upon the security of the Consolidated Fund of the State but within the limits fixed by the Parliament.

3. A state cannot raise any loan without the consent of the Centre if there is any outstanding of part of loan made to the state by the centre.

Which of the above given statements are correct?

1 and 2 only

1, 2 and 3 only

2 and 3 only

1 and 3 only

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Explanation:

The Central government can borrow either within India or outside upon the security of the Consolidated Fund of India but within the limits fixed by the Parliament. A state government can borrow from India and not from abroad upon the security of the Consolidated Fund of the State but within the limits fixed by the state legislature. A state cannot raise any loan without the consent of the Centre if a guarantee has been given by the Centre.