Sections 32 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapter V of the Air Act is the money chapter for the Boards. It provides for contributions by the Central Government, a fund for each State Board, borrowing powers, a yearly budget, an annual report with fixed periods for forwarding it and laying it before the legislature, and accounts audited by a qualified auditor. It does not impose any duty on a factory owner, but it explains how the regulators are funded and held to account.
This article is current as amended up to the Jan Vishwas (Amendment of Provisions) Act, 2023 (in force for this Act from 1 April 2024). Sections 32 to 36 were not changed by that Act. Sections 33A and 35 were inserted or substituted by Act 47 of 1987 with effect from 1 April 1988. Later amendments and notifications should be checked. For help in following how a Board is governed and answerable, our legal consultation team can help.
The Central Government may make contributions to State Boards after Parliament's appropriation (section 32). Every State Board has its own fund (section 33) and may borrow with Government consent (section 33A). Each Board prepares a budget (section 34) and an annual report forwarded within four months of the financial year's end and laid before Parliament or the State Legislature within nine months (section 35), and keeps audited accounts (section 36). A State Pollution Control Board constituted under the Water Act is excepted from sections 32 and 33, because its Water Act fund also serves its air functions.
Section 32: contributions by the Central Government
The Central Government may, "after due appropriation made by Parliament by law in this behalf", make in each financial year such contributions to the State Boards as it thinks necessary to enable them to perform their functions under the Act. The proviso: nothing in the section applies to a State Pollution Control Board constituted under section 4 of the Water Act "which is empowered by that Act to expend money from its fund thereunder also for performing its functions, under any law for the time being in force relating to the prevention, control or abatement of air pollution".
Section 33: fund of the Board
Section 33(1). Every State Board has "its own fund for the purposes of this Act". All sums paid to it by the Central Government, and all other receipts "by way of contributions, if any, from the State Government, fees, gifts, grants, donations benefactions or otherwise", are carried to the fund, and all payments are made from it.
Section 33(2). A State Board may expend such sums as it thinks fit for performing its functions, and the sums are expenditure payable out of the fund.
Section 33(3). The section does not apply to a State Pollution Control Board under the Water Act which is empowered by that Act to spend its Water Act fund on air functions too.
The effect is that in most States, where the Water Act Board is also the Air Act Board (see sections 3 to 6), there is one fund, governed by the Water Act. A separate Air Act fund exists only for a separately constituted Air Act State Board.
Section 33A: borrowing powers
A Board may, "with the consent of, or in accordance with the terms of any general or special authority given to it by, the Central Government or, as the case may be, the State Government", borrow money from any source by way of loans or issue of bonds, debentures or other instruments as it deems fit for discharging all or any of its functions under the Act.
Section 34: budget
The Central Board or State Board shall, during each financial year, prepare, in the form and at the time prescribed, "a budget in respect of the financial year next ensuing showing the estimated receipt and expenditure under this Act", and send copies to the Central Government or the State Government as the case may be.
Section 35: annual report
| Sub-section | Board | Forward to | Within | Laid before | Within |
|---|---|---|---|---|---|
| (1) | Central Board | Central Government | Four months from the last date of the previous financial year | Both Houses of Parliament, by that Government | Nine months of the last date of the previous financial year |
| (2) | Every State Board | State Government | Four months from the last date of the previous financial year | The State Legislature, by that Government | Nine months from the last date of the previous financial year |
The report is in the prescribed form and gives "full account of its activities under this Act during the previous financial year". The periods run from the last date of the previous financial year.
Section 36: accounts and audit
| Sub-section | Rule |
|---|---|
| (1) | Every Board maintains proper accounts and other relevant records for its functions under the Act and prepares an annual statement of accounts in the form prescribed by the Central Government or the State Government |
| (2) | The accounts are audited by an auditor duly qualified to act as an auditor of companies under section 226 of the Companies Act, 1956 |
| (3) | The auditor is appointed by the Central Government or the State Government, as the case may be, on the advice of the Comptroller and Auditor General of India |
| (4) | The auditor has the right to demand the production of books, accounts, connected vouchers and other documents and papers, and to inspect any of the offices of the Board |
| (5) | The auditor sends a copy of the report with an audited copy of the accounts to the Central Government or the State Government |
| (6) | The Central Government lays the audit report before both Houses of Parliament as soon as may be after receipt |
| (7) | The State Government lays it before the State Legislature as soon as may be after receipt |
The Companies Act, 1956 is named as printed; it has since been replaced, and this article does not map the reference.
Who prepares what
| Document | Prepared by | Sent to | Section |
|---|---|---|---|
| Budget | Central Board or State Board | Central Government or State Government | 34 |
| Annual report | Central Board or State Board | Central Government or State Government | 35 |
| Accounts and annual statement | Every Board | Auditor, then Government | 36 |
| Audit report | Auditor | Central Government or State Government, then Parliament or Legislature | 36(5)-(7) |
For the matching Water Act provisions, which govern the combined Board's fund in most States, see sections 34 to 40 of the Water Act.
Why it matters to an industry
Fees paid for consent and other receipts go into a Board's fund. Annual reports and audit reports are public documents laid before the Legislature, and they can show how the Board is working. They create no compliance duties for a factory, and the Act prints no fee here.
An example
A State has no Water Act Board but has constituted a separate Air Act State Board under section 5. It receives a Central contribution under section 32, carries it to its own fund under section 33, and prepares its budget for the coming year under section 34. Within four months of the end of the financial year it forwards its annual report to the State Government, which lays it before the State Legislature within nine months.
Need help with governance questions?
Questions on how a Board is funded, who audits it and where its reports are laid arise in public-interest and regulatory matters. Our legal consultation team can help you identify the right provision and the right record.
Key takeaways
- The Central Government may contribute to State Boards after Parliament's appropriation.
- A State Board has its own fund, except a Water Act Board that spends its Water Act fund on air functions too.
- A Board may borrow with Government consent or under a general or special authority.
- The annual report goes to the Government within four months and is laid before Parliament or the Legislature within nine months of the last date of the previous financial year.
- Accounts are audited by a qualified auditor appointed on the advice of the Comptroller and Auditor General of India.
Read next
- Sections 16 to 18: functions of the Boards
- Sections 34 to 40 of the Water Act: Board funds and audit
- Sections 37, 38 and 38A: penalties
- Sections 3 to 6: the Central and State Boards
Disclaimer: Based on the Environment (Protection) Act, 1986, the Air (Prevention and Control of Pollution) Act, 1981 and the Public Liability Insurance Act, 1991 as amended by the Jan Vishwas (Amendment of Provisions) Act, 2023 (in force for these Acts from 1 April 2024), the Water (Prevention and Control of Pollution) Act, 1974 as amended by its Amendment Act of 2024 (which applies only in the States and Union territories it names and in States that adopt it), and the National Green Tribunal Act, 2010 as amended by the Tribunals Reforms Act, 2021, as consulted on 3 October 2026. Later amendments, rules and notifications should be checked. This article is general information, not legal advice; check the official text before acting.