Under the Indian Constitution, which article provides the framework for states to borrow upon the security of the Consolidated Fund of the State, subject to conditions imposed by the Union government?

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12 August 2026

Tamil Nadu Assured Pension Scheme (TAPS)

The topic involves a specific state-level pension policy and its implications for fiscal federalism and government budgeting, which are core themes in the UPSC GS2 and GS3 syllabus.

Notes

The Tamil Nadu Assured Pension Scheme (TAPS) is a proposed initiative by the state government.
Implementation of TAPS is contingent upon the Union government granting approval for the state to borrow ₹11,000 crore.
The state government has announced an interim payout for employees retiring on or after January 1, 2026, pending final scheme approval.
Fiscal data indicates a rise in revenue deficit from ₹46,538 crore in 2021-22 to ₹78,324 crore in 2025-26.
The State’s Own Tax Revenue (SOTR) as a percentage of GSDP has declined from 5.93% to 5.45%.

Questions

Discuss the fiscal challenges faced by State governments in India regarding the implementation of social welfare schemes and the role of the Union government in regulating state borrowing under Article 293 of the Constitution. 150 words

Attempt this — 150 words in 8 min

0 / 150 words 8:00

Prelims

Under the Indian Constitution, which article provides the framework for states to borrow upon the security of the Consolidated Fund of the State, subject to conditions imposed by the Union government?

Syllabus

Topics

Sources

‘TAPS will be implemented if Central govt. gives nod for borrowing’

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