Borrowing by the Government of Indi

Draft Article 268, Draft Constitution of India 1948

The executive power of the Union extends to borrowing upon the security of the revenues 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.

Article 292, Constitution of India 1950

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.

Draft Article 268 (Article 292, Constitution of India 1950) was debated on 10 August 1949. This Draft Article provided that the Union could borrow funds and give guarantees against the revenues of India within the limits fixed by law as a part of its executive powers.

The Chairman of the Drafting Committee proposed a minor amendment to the Draft Article- to replace the term ‘revenues of India’ with ‘Consolidated Fund of India’.

A Member expressed concern that during operation of the Draft Article, the Executive should not take the entire responsibility on itself and instead place the matter before Parliament. Some Members believed that the Union Executive should not be given such wide powers and Parliament should be vested with more powers in this matter.

The Chairman of the Drafting Committee reassured that Parliament is empowered to make a law to limit the powers of the Union Executive to borrow funds under this Draft Article. Therefore, he believed there was no need to further limit the powers of the Union Executive under this Draft Article.

The minor amendment proposed by the Chairman of the Drafting Committee was accepted.

The Draft Article as amended was adopted on 10 August 1949.