(1) The Municipality may, from time to time, raise, by a resolution in this behalf passed at a meeting of the Municipality, a loan within the limits set by the comprehensive debt limitation policy framed under Section 141, any sum of money which may be required for the purpose of
(a) construction of works under this Act, or
(b) acquisition of lands and buildings for the purposes of this Act, or
(c) paying off any debt due to the State Government, or
(d) repayment of a loan raised under this Act, or
(e) acquisition of a public utility concern which renders such services as the Municipality is authorized to render under this Act, or
(f) purchase of vehicles, and other machinery necessary for carrying out the purposes of this Act, or
(g) any other purpose for which the Municipality is, by or under this Act or any other law for the time being in force, authorized to borrow:
Provided that any loan proposed to be raised which goes beyond the limits set by the comprehensive debt limitation policy as aforesaid shall require the previous sanction of the State Government in that regard to its purposes, the quantum, the rate of interest and the period for repayment, and the other terms and conditions, if any:
Provided further that in addition to the loans as aforesaid, the Municipality may also take loan from the State Government or any statutory body or public sector corporation:
Provided also that the State Government shall grant any loan to, or guarantee any loan raised by, the Municipality subject to its repaying capacity ascertained in the prescribed manner.
(2) When any loan has been raised under sub-Section (1),-
(a) no portion thereof shall, without the previous sanction of the State Government, be applied to any purpose other than that for which it has been raised, and
(b) no portion of any loan raised for any of the purposes referred to in that sub-Section shall be applied to the payment of salaries or allowances to any officer or other employee of the Municipality, other than those who are exclusively employed for the purpose for which the loan has been raised.
Explanation. - The expression "dues under this Act" in sub-Section (1) shall, for the purposes of clause (e) of that sub-Section, be deemed to include the income derivable from the public utility concern referred to in that clause.