The government has currently borrowed an quantity of Rs 24,000 crore on behalf of the states in 4 instalments and has passed it on to them.Kerala and West Bengal have joined the league of states picking out Option-1 to meet the GST implementation shortfall. Including these two states, 25 states and all union territories with Legislative Assembly have favoured Option-I proposed by the central government. After producing a option, Kerala and West Bengal are poised to get Rs ten,197 crore by means of particular borrowing window, to meet the GST implementation shortfall. In addition, each states have also received permission to raise more Rs 11,309 crore by means of borrowings, according to the Ministry of Finance.
The states & UTs that have selected Option-1 are having the quantity equivalent to the shortfall arising out of GST implementation by means of a particular borrowing window place in location by the Centre. The government has currently borrowed an quantity of Rs 24,000 crore on behalf of the states in 4 instalments and has passed it on to them.
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Besides having the facility of a particular window for borrowings, the states are also entitled to get unconditional permission to borrow the final installment of .five per cent of Gross State Domestic Product (GSDP), out of the two per cent more borrowings permitted by the Centre beneath the Atmnirbhar Abhiyaan. It is to be noted that the more borrowing is more than and above the particular window of Rs 1.1 lakh crore.
Meanwhile, selection-two requires into account the influence of the pandemic, proposing states to borrow the complete Rs two.35 lakh crore and bearing the interest burden, even though principal will be repaid from the cess proceeds. The GST shortfall quantity — Rs 97,000 crore — will not be counted as states’ debt, whilst the rest of the quantity of Rs 1.38 lakh crore will be counted in the books of the states. The challenge of GST cess compensation heated up in current months following the opposition celebration-led states refused to opt for the alternatives presented by the Centre. However, following continuous efforts from the Centre, different such states opted for Option-1.