(5)After completing such inquiry, the Collector shall forward to the State Government the application together with the papers of the inquiry and his report. The State Government may, thereupon, either retuse the application or grant the necessary permission in the prescribed form subject to such conditions, as it may deem fit, including the condition, where necessary, regarding payment to the person who in the opinion of the State Government is entitled to it, for the water likely to be appropriated by the permanent holder at a rate not exceeding the rate which the permanent holder would have been required to pay if the same quantity of water had in similar circumstances been given to the permanent holder from any canal maintained by Government.