With Jharkhand opting for Option-1 to borrow the Goods and Services Tax (GST) revenue shortfall, all the 28 states and 3 Union Territories have now opted to borrow for the revenue shortfall arising out of the GST implementation, the Ministry of Finance said in a statement.
The Union government has set up a special borrowing window for the states and union territories to borrow the amount of shortfall arising out of GST implementation. The window has been operationalised since October 23, 2020 and the ministry said that the Union government has already borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments and passed it on to the States and Union Territories, who had chosen Option-1 at the time.
The funds borrowed through the special window were released to the states and UTs on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020 and December 1, 2020.
Jharkhand will also receive funds raised through this window starting from the next round of borrowing. The next instalment of Rs 6,000 crore will be released to the States/UTs on December 7, 2020.
Under Option-1, besides the special window for borrowings, states are also entitled to get unconditional permission to borrow the final instalment of 0.50% of Gross State Domestic Product (GSDP) out of the 2% additional borrowings permitted by the Government of India, under Atma Nirbhar Abhiyaan in May. This is over and above the Special Window of Rs 1.1 lakh crore.
On receipt of the choice of Option-1, the Government of India has granted additional borrowing permission of Rs.1,765 crore to the State Government of Jharkhand (0.50 % of Jharkhand’s GSDP).
Prior to Jharkhand, Chhattisgarh was the last state to communicate its acceptance to opt for Option-1 to meet the GST revenue shortfall.