Tamil Nadu opts for Option-1 to bridge GST gap, gets permission to borrow additional ₹9,627 cr1 min read . Updated: 14 Oct 2020, 06:48 PM IST
So far, 21 states and two Union Territories, including Delhi and Jammu and Kashmir, have so far requested Option-1
Ministry of Finance's Department of Expenditure has granted permission to Tamil Nadu to raise an additional amount of ₹9,627 crore through open market borrowings on Wednesday. The permission was given to Tamil Nadu after the state formally communicated its acceptance for Option-1 to meet the shortfall arising out of GST implementation.
So far, 21 states and two Union Territories, including Delhi and Jammu and Kashmir, have so far requested Option-1.
The Ministry of Finance on Tuesday permitted 20 states to raise ₹68,825 crore through borrowings to meet the GST revenue shortfall. This comes a day after the Goods and Services Tax (GST) Council meet on Monday ended without reaching a consensus on compensating states.
Additional borrowing permission has been granted at 0.50% of the Gross State Domestic Product (GSDP) to those states who have opted for Option- 1 out of the two options suggested by the Ministry of Finance to meet the shortfall arising out of GST implementation.
With today’s permission, 21 states have been granted permission to mobilise ₹78,542 crore as of now.
The borrowing permission issued to the 21 states is over and above the borrowing permission of around ₹1.10 lakh crore to be issued to enable the states to meet the revenue shortfall arising out of GST implementation. A special window is being created by the Ministry of Finance to facilitate this 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, States are also entitled to get unconditional permission to borrow the final instalment of 0.50% of GSDP out of the 2% additional borrowings permitted by the Government of India, under Atmanirbhar Abhiyaan on 17th May, 2020. This is over and above the Special Window of ₹1.1 lakh crore.
Twenty States who were granted the permission yesterday were - 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.