Chennai: The Department of Expenditure, Ministry of Finance, has granted permission to 20 States to raise an additional amount of Rs 68,825 crore through open market borrowings.
Additional borrowing permission has been granted at 0.50 per cent of the Gross State Domestic Product (GSDP) to those States who have opted for Option-1 out of the two options suggested by the Ministry of Finance to meet the shortfall arising out of GST implementation.
In the meeting of GST Council held on 27 August, 2020, these two options were put forward and were subsequently communicated to the States on 29 August.
Twenty States have given their preferences for Option-1. These States are – Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand . Eight States are yet to exercise an option.
Facilities available to the States who choose Option-1 include: A special borrowing window, coordinated by the Ministry of Finance to borrow the amount of shortfall in revenue through issue of debt. The total shortfall in the revenue of the States on this account has been estimated at around Rs 1.1 lakh crore.
Permission to borrow the final instalment of 0.5 per cent of GSDP out of the 2 per cent additional borrowings permitted by the Government of India in view of the Covid pandemic, waiving the reforms condition.