Finance, Property, Contracts
(1) A state's executive power extends to borrowing within India on the security of its own Consolidated Fund, within limits its own Legislature fixes. (2) The Union may lend to states or guarantee state loans, charged on the Consolidated Fund of India. (3) A state cannot raise a new loan without the Union's consent if it still owes any outstanding loan from (or Union-guaranteed loan involving) the Union government. (4) The Union's consent can come with conditions.
States can borrow money too, but with an important constraint: once a state owes the Union government money (or has a Union-guaranteed loan outstanding), it needs the Union's permission before taking on any NEW borrowing - giving the Union real leverage over indebted states' further borrowing plans, since most states have historically had at least some outstanding Union loans or guarantees.
This is why heavily-indebted states often need the central government's consent before raising new market borrowings - a significant practical constraint on state fiscal autonomy, given how many states have historically carried some form of Union-linked debt.