Chhatisgarh has become one of those states to accept Central Government’s proposal to convert the Goods and Services Tax (GST) outstanding dues into a borrowed funds to get rid of the outstanding GST burden. The state will get Rs. 3,109 crore from the Central Government through the special window to negate the shortfall of GST revenue.
By this acceptance of the borrowing proposal from the Centre, Chhattisgarh has become one of the 27 states and 3 union territories who have accepted the Centre’s borrowing proposal and making Jharkhand the only state which is yet contemplating at accepting the Centre’s borrowing proposal.
The Chhattisgarh government has sent it’s acceptance of Option-1 to the Central Government on Thursday to meet the revenue exigencies felt due to the GST implementation. Notably, all states in the country except Jharkhand and all 3 union territories with legislative assembly have shared their decision to adopt Option-1 to meet the shortfall arising out of GST implementation, read the statement by Finance Ministry on Thursday.
It is noteworthy to mention that the Central Government of India has organized a special borrowing window for states to borrow the approved funds after they accept the Option-1 proposal by the Centre to the states and the Union Territories.
Reports state that the Central Government has already borrowed around Rs. 30,000 crore on behalf of the states in 5 installments and has reportedly passed it on to 26 states and 3 union territories on 23 October, 2 November, 9 November and 1 December.
After Chhattisgarh has accepted the Centre’s borrowing proposal, it will too start receiving funds raised through this special borrowing window from the next round of borrowings. Apart from the borrowing through this special window, the state can now enjoy the additional borrowing of Rs. 1,792 permitted by the Government of India which is 0.50 per cent of its Gross State Domestic Product (GSDP), added the Finance Ministry’s statement.
This is because as per the terms of Option-1 that the state has accepted to overcome the shortfall arising out of GST implementation, every state or Union Territories accepting Option-1 will be entitled to get unconditional permission to borrow the final installment of 0.50 per cent of GSDP out of the total 2 per cent additional borrowings as granted by the Central Government of India, under Atmanirbhar Abhiyaan. It is noteworthy to mention that this additional borrowings are over and above the special window of Rs. 1.1 lakh crore.
Apart from the Option-1, the Centre has offered the second optionto borrow the entire Rs. 1.83 lakh crore GST collection shortfall.
States who have accepted the Option-1 of Central Government
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.