All states except Jharkhand choose borrowing option to meet GST shortfall
08 December 2020
Chhattisgarh has communicated its acceptance of option of a special borrowing window (Option-1) to meet the revenue shortfall arising out of GST implementation, which takes the number of states that favour Option-1 to 27.
As of now all states except Jharkhand and the three union territories with legislative assembly have decided in favour of Option-1.
Chhattisgarh will get Rs3,109 crore through special borrowing window to meet the GST implementation shortfall. The states has also received permission to raise an additional Rs1,792 crore through borrowings.
The states and union territories that choose Option-1 are getting the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Government of India. The window has been operational since 23 October 2020 and the GoI has already borrowed an amount of Rs30,000 crore on behalf of the sates in five instalments and passed it on to the states and UTs.
The funds borrowed through the special window were released to the states and UTs on 23 October 2020, 2 November 2020, 9 November 2020, 23 November 2020 and 1 December 2020. Now, Chhattisgarh will also receive funds raised through this window starting from the next round of borrowing.
Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the states are also entitled to get unconditional permission to borrow the final instalment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the centre, under Atmanirbhar Abhiyaan on 17 May 2020. This is over and above the Special Window of Rs1.1 lakh crore. On receipt of the choice of Option-1, the centre has granted additional borrowing permission of Rs1,792 crore to the state government of Chhattisgarh (0.50 per cent of Chhattisgarh’s GSDP).
So far an amount of Rs30,000 crore raised through special window has been passed on to the states/ UTs while states have raised Rs105,065 additional under the 0.50 per cent borrowing allowed to states.