(1) Subject to the provisions of this section, the Government of any State may, after it has issued a notification under sub-section (4) of section 1, in lieu of constituting a Board under section 5 enter into an agreement with the Government of a contiguous State to provide that the Board constituted for the latter State shall exercise the functions of a Board under this Act in the former State.
(2) Subject to such modifications (being of a character not affecting the general operation of the agreement) of the terms of the agreement as may from time to time be agreed upon by the State Government concerned, an agreement entered into under this section shall be for a period of not less than twenty-five years but may be determined earlier by mutual consent.
(3) An agreement under this section may
(a) make such financial arrangements between the participating State Governments as may be necessary for the purposes of the agreement;
(b) provide for consultation between the participating State Governments either generally or with reference to particular matters arising under this Act;
(c) generally make such incidental, supplementary or ancillary provisions, not inconsistent with this Act, as may be deemed necessary or expedient for giving effect to the agreement.