Question 13.GS2GS2

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)

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Answer Strengths Gaps Keywords

Introduction

Kerala government has critiqued central government for restricting its power to borrow under Article 293.

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:

1To maintain fiscal health of State

by deterring extravagant expenditure.

2To prevent freebies which may have impact on overall fiscal autonomy of nation

3To promote prudent and pragmatic expenditure of public money

4To act as trustee of taxpayers money

However, these restrictions have time and again caused cooperative disruption.

(II) Challenges:

1States as autonomous units in their own domain rather than satellites of Centre [Schedule VII - list II]

2Hindering states capacity to give effect to 'niche' needs of its people

3Health burden on Kerala due to frequent epidemics.

4Tied nature of grants often restricts states capabilities and promote uniformity

5Centre government didn't release grants under Samagra Shiksha Abhiyaan for T.N.

6Affects development works and distorts public trust

7protests, agitations [anti-Hindi campaign]

8Disregards idea of context specific spending and replaces it with 'One size fits all' approach.

Maintaining fiscal health is the prime responsibility of any government, however some special fiscal autonomy based on performance can be the way forward

228 words6 paragraphs

Conclusion

Maintaining fiscal health is the prime responsibility of any government, however some special fiscal autonomy based on performance can be the way forward

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

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Page 32

Topper

Ananya Rana

AIR 602025

Subject & Paper

GS2GS2

Topic

Federal Structure

Centre-State Financial Relations

Article 293 and State Borrowing Powers

Writing Stats

266

Total words

Paragraphs

analytical

Tone