All the 28 states and 3 union territories with legislature have decided to go for option-1 to meet the revenue shortfall arising out of the Goods and Services Tax (GST) implementation, Ministry of Finance said in a statement on Saturday.
Jharkhand, the only remaining state, has now also communicated its acceptance of option-1. All the 3 union territories with legislative assembly who are members of the GST council have already decided in favour of option-1.
"The government has set up a special borrowing window for the states and union territories who choose option-1 to borrow the amount of shortfall arising out of GST implementation. The window has been operationalised since October 23, 2020 and the government has already borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments and passed it on to the states and union territories, who chose option-1," the Ministry of Finance said.
Now, the state of Jharkhand will also receive funds raised through this window starting from the next round of borrowing. The next instalment of Rs 6,000 crore will be released to the states/UTs on December 7, 2020, it added.
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, the states are also entitled to get unconditional permission to borrow the final instalment of 0.50 percent of Gross State Domestic Product (GSDP) out of the 2 percent additional borrowings permitted by the government, under Atma Nirbhar Abhiyaan on May 17, 2020.
This is over and above the special window of Rs 1.1 lakh crore. On receipt of the choice of option-1, the government has granted additional borrowing permission of Rs 1,765 crore to the state government of Jharkhand (0.50 percent of Jharkhand’s GSDP), the ministry said.