Section 27 of The Airports Authority of India Act, 1994
- (1)The Authority may, with the consent of the Central Government or in accordance with the terms of any general or special authority given to it by the Central Government, borrow money from any source by the issue of bonds, debentures or such other instruments as it may deem fit for discharging all or any of its functions under this Act.
- (2)The Central Government may guarantee in such manner as it thinks fit, the repayment of the principal and the payment of interest thereon with respect to the loans borrowed by the Authority under sub-section (1).
- (3)Subject to such limits as the Central Government may, from time to time, lay down, the Authority may borrow temporarily by way of overdraft or otherwise such amounts as it may require for discharging its functions under this Act.
Summary
- The Authority is permitted to borrow money to carry out its duties, but it must have the consent or authority of the Central Government to do so.
- It can raise this money by issuing financial tools like bonds and debentures to lenders.
- The Central Government can help the Authority get loans by guaranteeing to the lenders that the principal and interest will be repaid.
- For short-term cash needs, the Authority can borrow temporarily using bank overdrafts.
- The Central Government decides the limits on how much money the Authority is allowed to borrow temporarily.
Practical examples
FAQ
1. Is the Authority allowed to borrow money?
Yes, it can borrow money from any source, but it needs the Central Government's consent or general authority first.
2. How does the Authority borrow large amounts of money from lenders?
It can issue financial instruments like bonds or debentures.
3. What happens if banks are hesitant to lend money to the Authority?
The Central Government can guarantee the repayment of the loan and the interest to make the lenders feel secure.
4. Can the Authority take out quick, temporary loans for emergencies?
Yes, it can borrow temporarily through overdrafts, as long as it does not exceed the limits set by the Central Government.
Test yourself
Q1.Under Section 27 of The Airports Authority of India Act, 1994, what condition must be met before the Authority can issue bonds to borrow money?
Q2.According to Section 27 of The Airports Authority of India Act, 1994, what role can the Central Government play to help the Authority secure a loan?
Q3.Under Section 27 of The Airports Authority of India Act, 1994, how is the Authority allowed to handle temporary borrowing needs?
Q4.Section 27 of The Airports Authority of India Act, 1994 permits the Authority to borrow money. If the Authority borrows heavily, how does Section 28 ensure there is proper tracking of this debt?