Section 20 of Establishment and Constitution of Authority — Subventions and loans to Authority

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Official Legislative Text

20.

(1)The State Government may from time to time, make subventions to the Authority for the purposes of this Act on such terms and conditions as the State Government may determine.
(2)The State Government, may, from time to time, advance loans to the Authority for the purposes of this Act, on such terms and conditions as the State Government may determine.

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Summary

Under Section 20 of the Act, the State Government may grant subventions (financial aid or subsidies) to the Authority from time to time.
Any subventions provided by the State Government must be used solely for the purposes of the Act.
The State Government has the legal power to establish whatever terms and conditions it deems fit when making subventions.
The State Government may advance loans to the Authority from time to time to carry out the purposes of the Act.
All loans advanced by the State Government are governed by terms and conditions determined by the State Government.

Practical examples

1On 10 October, the Authority requires additional capital to implement an urgent drainage scheme to protect ancient ruins from waterlogging. The State Government reviews the project and sanctions a subvention of 4,000,000 rupees under Section 20, imposing the condition that the funds must be spent exclusively on drainage engineering within twelve months.

2To purchase patrol vehicles and radio equipment for the security force, the Authority requests financial assistance. Under Section 20, the State Government approves an advance loan of 1,500,000 rupees, establishing a four-year repayment schedule with three percent annual interest as its determined terms and conditions.

FAQ

1. Who decides the terms and conditions on loans advanced under Section 20?

Under Section 20 of the Act, the State Government determines the terms and conditions for loans advanced to the Authority.

2. What is the legal purpose for which subventions and loans can be given under Section 20?

Under Section 20 of the Act, subventions and loans must be made strictly for the purposes of the Act.

3. Is the State Government obligated to provide loans every year under Section 20?

No, under Section 20 of the Act, the State Government may provide subventions or advance loans from time to time as it sees fit.

4. What distinguishes a subvention from a loan under Section 20?

Under Section 20 of the Act, both are financial instruments provided by the State Government for the Act's purposes, where a subvention is a government grant or subsidy, while a loan is borrowed money repayable under state terms.

Practice Quiz

Q1.Under Section 20 of this Act, who holds the statutory discretion to decide the conditions attached to a government loan advanced to the Authority?

Q2.Under Section 20 of this Act, for what objective may the State Government make subventions or advance loans to the Authority?

Q3.When the Authority receives loan funds from the State Government under Section 20, how must those funds be handled under Section 17 of this Act?

Q4.Under Section 20 of this Act, how often may the State Government issue subventions and loans to the Authority?

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