Telangana has also been given the permission to raise additional Rs 5,017 crore through extra borrowing accounting for 0.5% of the state’s GSDP.

Telangana CM K Chandrashekar Rao seated and looking to his right He is wearing a white shirt and sporting a white shawl with a green border around his neckPTI file image
Money GST Wednesday, November 18, 2020 - 10:48

The Telangana government has communicated its acceptance for Option 1 out of the two options suggested by the Union Finance Ministry to meet the shortfall in revenue arising out of GST implementation. The state has now joined 22 other states and three Union Territories who have opted for Option 1.

The state will now get Rs 2,380 crore through special borrowing window and also permission to raise additional Rs 5,017 crore through extra borrowing accounting for 0.5% of Telangana’s GSDP.

The 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 Centre. The window has been operationalised now and the government has already borrowed an amount of Rs 18,000 crore on behalf of the states in three instalments and has passed it on to 22 states and 3 Union Territories on October 23, November 2 and November 9.

Now, Telangana will receive funds raised through this window. The next instalment of borrowings is likely to be released on November 23.

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 under Aatmanirbhar Abhiyaan on May 17. This is over and above the Special Window of Rs 1.1 lakh crores.

On receipt of the choice of Option 1 from Telangana, the Centre on Tuesday granted the state additional borrowing permission of Rs 5,017 crore (0.5 per cent of Telangana's GSDP).

States who 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, Telangana, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand, along with the three Union Territories of Delhi, Jammu & Kashmir and Puducherry.

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