Chhattisgarh accepts Centre’s borrowing proposal for GST shortfall; Jharkhand lone state to keep out

New Delhi: Chattisgarh has accepted the Centre’s borrowing proposal and will get Rs 3,109 crore through the special window to meet the goods and services (GST) revenue shortfall.

With this, 27 states and 3 union territories have accepted the Centre’s borrowing plan, leaving only Jharkhand which is yet to decide.

The government of Chhattisgarh has communicated its acceptance of option-1 to meet the revenue shortfall arising out of GST implementation. All states except Jharkhand and all the 3 union territories with legislative Assembly have decided in favour of option-1, a finance ministry statement said on Thursday.

The states and union territories that 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 Centre has already borrowed Rs 30,000 crore on behalf of the states in five installments and has passed it on to 26 states and 3 union territories on 23 October, 2 November, 9 November, 23 November, and 1 December.

From the next round of borrowings, Chattisgarh too would receive funds raised through this window.

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 installment of 0.50 per cent of gross state domestic product (GSDP) out of the 2 percent additional borrowings permitted by Government of India, under Aatmanirbhar Abhiyaan. This is over and above the special window of Rs 1.1 lakh crore.

On receipt of the choice of option-1 from the Government of Chattisgarh, the Government of India has granted additional borrowing permission of Rs 1,792 crore to the state government of Chattisgarh (0.5 percent of Chattisgarh’s GSDP), the ministry added.

Separately, Chattisgarh will get Rs 3,109 crore through a special borrowing window to meet the GST implementation shortfall.

States who have opted for option-1 are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tripura, Tamil Nadu, Telangana, Uttar Pradesh, and Uttarakhand and West Bengal, along with the three union territories of Delhi, Jammu and Kashmir, and Puducherry.

Under the borrowing plan (option-1), the centre would borrow from the market Rs 1.10 lakh crore which the revenue shortfall on account of GST implementation. The remaining Rs 73,000 crore shortfall is estimated to be the revenue impact of the COVID-19 pandemic.

The second option given by the Centre was for the states to borrow the entire Rs 1.83 lakh crore collection shortfall.