- The State Government shall frame a Comprehensive Debt Limitation Policy applicable in the case of loans, including short-term loans, to be raised by the Municipalities, laying down, inter-alia, the general principles governing the raising of loans by the Municipalities, the limit of the loans which any Municipality may raise having regard to its financial capacity, the rate of interest to be paid for such loans, and the terms and conditions, including the period of repayment thereof.
