The Centre on Tuesday permitted 20 states to lift Rs 68,825 crore via open market borrowings to bridge the GST income shortfall. The choice got here a day after the GST Council assembly failed to succeed in a consensus on the stalemate over the Centre’s proposal of states borrowing in opposition to future GST collections to make up for the shortfall.
The projected whole compensation shortfall within the present fiscal stands at Rs 2.35 lakh crore.
The Centre had in August given two choices to the states — to borrow both Rs 97,000 crore from a particular window facilitated by the RBI or Rs 2.
35 lakh crore from the market. It had additionally proposed extending the compensation cess levied on luxurious, demerit and sin items past 2022 to repay the borrowing.
The Division of Expenditure, Ministry of Finance, has granted permission to 20 states to lift a further quantity of Rs 68,825 crore via open market borrowings, an official assertion mentioned on Tuesday.
“Further borrowing permission has been granted on the fee of zero.50 per cent of the Gross State Home Product (GSDP) to these States who’ve opted for Choice- 1 out of the 2 choices instructed by the Ministry of Finance to satisfy the shortfall arising out of GST implementation,” it mentioned.
Within the assembly of the GST Council held on August 27, it mentioned, these two choices had been put ahead and had been subsequently communicated to the states on August 29.
“Twenty States have given their preferences for Choice-1. These States are – Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand. Eight States are but to train an possibility,” it mentioned.