Chhatisgarh takes Rs 1.1 lakh cr option to meet GST compensation shortfall

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03/12/2020

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Chhatisgarh takes Rs 1.1 lakh cr option to meet GST compensation shortfall

Chhatisgarh has become the latest state to choose Rs 1.1 lakh crore option to meet the shortfall from goods and service tax (GST) implementation, and will get Rs 3109 crore through special borrowing window, the finance ministry said Thursday.

On receipt of the choice of Option-1 from Chhattisgarh, the Government of India has granted additional borrowing permission of Rs.1792 crore, 0.5% of Chhattisgarh’s gross state domestic product (GSDP)," it said in a statement.

The Centre had offered to all states two options – Rs 97,000 crore and Rs 2.35 lakh crore – with different set of conditions for each to meet the GST compensation shortfall. The Centre sweetened the first option by increasing the borrowing limit to Rs 1.1 lakh crore and agreed to borrow the amount and transfer to the states as loans on a back to back basis.The second option was taken off the table.

As of now, 27 states and three union territories had taken the first option and the Centre had started issuing the funds in weekly tranches through a special window coordinated by the finance ministry.

Since October 23, 2020 the government of India has borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments.

The amount of additional borrowing permission granted to 27 states stands at Rs 1,05,065 crore.