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Congress-ruled Rajasthan has accepted the Centre’s borrowing proposal to meet GST revenue shortfall and will get over ₹4,600 crore through the special window.
“The Government of Rajasthan has communicated its acceptance for Option-1 out of the two options suggested by the Ministry of Finance to meet the shortfall in revenue arising out of GST implementation,” the Finance Ministry said in a statement.
With this the state will get ₹4,604 crore through special borrowing window and also permission to raise additional ₹5,462 crore through borrowings, it added.
Before Rajasthan joined in, 21 states and three union territories (UTs) had opted for the borrowing plan proposed by the Centre to meet the ₹1.83 lakh crore shortfall in Goods and Services Tax (GST) collection of states.
Under the borrowing plan (Option-1), the Centre would borrow from market ₹1.10 lakh crore to meet revenue shortfall on account of GST implementation. The remaining ₹73,000 crore shortfall is estimated to be the revenue impact of the COVID-19 pandemic.
However, states like Kerala, Punjab, West Bengal, Chattisgarh, Jharkhand are yet to opt for the borrowing plan proposed by the Centre, saying the Centre should borrow the entire ₹1.83 lakh crore shortfall.
States which 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 ministry said.
The window has been operationalised now, and the Government of India already borrowed an amount of ₹12,000 crore on behalf of the states in two instalments and passed it on to 21 states and 3 UTs on October 23 and November 2, 2020.
Out of this ₹12,000 crore, Karnataka, Maharashtra and Gujarat have received ₹1,872 crore, ₹1,808 crore and ₹1,391 crore, respectively.
“The next instalment of borrowings is likely to be released on November 9, 2020,” the ministry added.
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 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the Government of India, under ‘Aatmnirbhar Abhiyaan’ on May 17, 2020.
This is over and above the special window of ₹1.1 lakh crore.
On receipt of the choice of Option-1 from the Government of Rajasthan, the Government of India has granted Rajasthan additional borrowing permission of ₹5,462 crore (0.5 per cent of Rajasthan’s GSDP).
The second option given by the Centre was for the states to borrow the entire ₹1.83 lakh crore collection shortfall.
States which have opted for Option-1 are -- Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand, along with the three UTs of Delhi, Jammu & Kashmir and Puducherry.
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