Jharkhand accepts GST borrowing plan; Centre-State tussle ends

The state will receive Rs 1,689 crore through the special window to meet GST shortfall and Rs 1,765 crore of additional borrowing under Option-I of the GST borrowing plan.

Business Desk, ETV Bharat: On Saturday, Jharkhand became the last state to accept the Option-I of GST borrowing plan proposed by the Centre. With this, all the 28 states and 3 union territories with legislature have agreed on a common stance of accepting the Centre's GST borrowing plan to compensate the loss of revenue to the states due to GST implementation.

Jharkhand will now receive Rs 1,689 crore through the special window to meet the GST implementation shortfall amid coronavirus crisis. Centre has also issued Jharkhand the permission to raise additional borrowing of Rs 1,765 crore, which is 0.5 per cent of the state's GSDP.

In the last few weeks, Orrisa, West Bengal, Kerala and Punjab-- the states which were most rebellious against the GST borrowing plan-- communicated their acceptance of Option-1 to meet the GST shortfall.

The Centre had put forward two options of borrowing to the states but many states were not convinced by any of the options. After several futile discussions between the states and the finance ministry, the matter has finally come to rest with all the states accepting the first option.

The Centre has already borrowed Rs 30,000 crore on behalf of the states in five instalments and passed it on to the States and UTs who chose Option-I. Jharkhand will receive funds from the next round of borrowing along with Chhattisgarh and Jharkhand. The next instalment of Rs 6,000 crore will be released on December 7, 2020.