Aside Jharkhand, all states and 3 UT pick Option-1 to meet GST income setback

On December 3, the Central Government informed that besides Jharkhand, all states and three union territories with legislative assemblies have chosen Option-1 to meet the revenue setback due to GST implementation.

Additionally, the Ministry of Finance in a press release said that the Chhattisgarh government has accepted Option-1 to meet the revenue shortfall.

Under this term, other than getting the office of an extraordinary window for borrowings to meet the deficiency emerging out of GST execution, the states are likewise qualified to get unlimited consent to get the last portion of 0.50 percent of Gross State Domestic Product (GSDP) out of the 2 percent moreover borrowings allowed by the Government of India, under Atmnirbhar Abhiyaan on 17 May 2020.

The press release said, “The states and union territories 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 Government of India. The window has been operationalized since October 23, 2020, and the Government of India has already borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments and passed it on to the State and Union Territories, which chose Option-1.”

The government funds were borrowed through this special window on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020, and December 1, 2020. The ministry added, “Now the State of Chhattisgarh will also receive funds raised through this window starting from the next round of borrowing.”

The amount of additional borrowing permission granted to 27 states is Rs 1,05, 065 crores, and the number of funds raised through the special window and released to the states is Rs 26966.73 crore, and Union Territories is Rs 3033.24 crore.

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