New Delhi: Opposition ruled Rajasthan has now communicated its acceptance for Option-1 out of the two options suggested by the Finance Ministry to meet the shortfall in revenues arising out of GST implementation.
With this, the state has now joined 21 other states and 3 Union Territories (Delhi, Jammu & Kashmir and Puducherry), which have opted for Option-1.
Opposition ruled states had earlier opposed the Centre's formula on GST compensation that made them borrow to meet GST compensation shortfall this year. With Centre now borrowing for onward lending to states, a broad consensus seems to be emerging over new the GST compensation settlement formula.
The states choosing 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 operationalised now and the government of India has already borrowed an amount of Rs 12,000 crore on behalf of the states in two instalments and has passed it on to 21 states and 3 UTs on October 23 and November 2.
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Now the government of Rajasthan will also receive funds raised through this window. The next instalment of borrowings is likely to be released on November 9.
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 Aatmanirbhar Abhiyaan on May 17, 2020. This is over and above the special window of Rs 1.1 lakh crore.
On receipt of the choice of Option-1 from the Rajasthan government, the Centre on Thursday granted the state additional borrowing permission of Rs 5,462 crore (0.5 per cent of Rajasthan's GSDP).
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.
(IANS Report)
