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)

# Article-293 → imposes certain restrictions on the borrowing powers: i → state cannot borrow unless they got Centre's approval. ii → Restriction of external borrowings by states. Constitutionally Valid → as they seek to promote fiscal prudence oversight.

But it leads to certain complexities for Indian federalism. # It Hinders Fiscal Autonomy of states as → 1) Nearly 60% of the spending happens at state level → in health, education, police etc. 2) Yet states heavily dependent on → Finance, Central Commission Grants and devolution, Aid. [44% of total] 3) This issue greater exacerbated by GST rolling out → limiting the taxation powers of states. # It disrupts cooperative federalism → 1) Leads of Confrontational federalism. 2) Centre-state disputes on rise: EWS Opposition ruled states allege centres discrimination towards them. 3) Greater centralization Tendencies violate 'Principle of subsidiarity' (2nd ARC) → Centre not willing to devolve to states and further states not willing to devolve to local bodies.

— Rasneet Kaur · AIR 51