The Department of Expenditure, Ministry of Finance, has today granted permission to 20 States to raise an additional amount of Rs.68,825 crore through open market borrowings.
Additional borrowing permission has been granted @ 0.50 % of the Gross State Domestic Product (GSDP) to those States who have opted for Option- 1 out of the two options suggested by the Ministry of Finance to meet the shortfall arising out of GST implementation.
In the meeting of the GST Council held on 27th August 2020, these two options were put forward and were subsequently communicated to the States on 29th August, 2020. Twenty States have given their preferences for Option-1. These states are – Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh, and Uttarakhand. Eight States are yet to exercise an option.
Facilities available to the States who choose Option-1 inter-alia include:
The Department of Expenditure, on 17th May 2020, had provided an additional borrowing limit of upto 2% of GSDP to the States. The final installment of 0.5% out of this 2% limit was linked to carrying out at least three out of four reforms stipulated by the Government of India. However, in the case of States who have exercised Option-1, to meet the shortfall arising out of GST implementation, the condition of carrying out the reforms to avail the final installment of 0.5% of GSDP has been waived. Thus, the 20 States, who have exercised Option-1, have become eligible to raise an amount of Rs 68,825 crore through open market borrowings. Action on the special borrowing window is being taken separately.
State-wise details are follows:
|S. No.||State||Additional borrowing allowed on 13.10.2020 (Rs in crore)|