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.

Article 293 of the Indian Constitution talks about the borrowing limits of state govt, while though designed for imparting fiscal prudence and discipline, adds a statement to the centre-state relation. Restrictions under 293: Cannot borrow outside the country. Borrowing only, if no outstanding debt with the centre. Access to FRBM only 2.1/of GSDP is the limit. Losing fiscal discipline and consortium.

Hinders fiscal autonomy of states due to disruption. In the recent Kerala govt petition in SC, against union w.r.t Art.293 - it said, the states finances are hit, so there is need to raise capital from outside sources Kerala. The state govt has responsibility in critical sectors that are fiscally demanding: health, education, etc. Post-covid economic stimulus is needed for increasing demand. The loss of revenue, post GST lack of so combination of compensation cost, adding to the misery of states exchequer. Increase the tussle between state and centre: Ministry right case (Steel authority of India case)

Increasing resort of centre to cess and surcharge - Non-divisible pool. Divisible declining creates district covered the relationship.