Para 3.13.4 — MSO (Audit)
Original Rule Text
3.13.4 Under Article 292 of the Constitution, the Union can raise money by borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by an Act of Parliament. These borrowings comprise of both internal and external debt. Internal debt represents loans raised in India and includes market loans, bonds, special securities issued to the Reserve Bank of India, rupee securities issued to external agencies like the International Monetary Fund, World Bank, Asian Development Bank, etc. It also includes borrowings through Treasury Bills issued to the Reserve Bank of India, the State Governments and other parties. External debt refers to the loans raised abroad by the Government of India.
What This Means
Under Article 292 of the Constitution, the Union Government can borrow against the security of the Consolidated Fund of India within limits set by Parliament. These borrowings include both internal debt (market loans, bonds, securities issued to RBI, rupee securities for international agencies like IMF and World Bank, and Treasury Bills) and external debt (loans raised abroad by the Government of India).
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Union Government's borrowing power comes from Article 292 of the Constitution
- 2Borrowing limits may be fixed by an Act of Parliament
- 3Internal debt includes market loans, bonds, special securities to RBI, and rupee securities to IMF/World Bank/ADB
- 4Treasury Bills issued to RBI, State Governments, and other parties are also internal debt
- 5External debt refers to loans raised abroad by the Government of India
Practical Example
The Union Government in its annual budget proposes to borrow Rs 15 lakh crore through various instruments: Rs 8 lakh crore in market loans (bonds sold to banks and public), Rs 3 lakh crore in Treasury Bills, Rs 2 lakh crore in special securities to RBI, and Rs 2 lakh crore from external sources like the World Bank. The auditor checks whether the total borrowing stays within limits fixed by Parliament and whether all instruments are correctly classified as internal or external debt.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the Consolidated Fund of India?▼
What is the difference between internal and external debt?▼
Can the Union Government borrow without any limit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.