The 28 states and the three Union Territories (UT) with legislatures have decided to opt for Option 1 to cover the income deficit that arises from the implementation of the Goods and Services Tax (GST), according to an official statement from the Ministry of Finance.
Jharkhand, the only remaining state, has now communicated its acceptance of Option-1, it said.
The central government has established a special indebtedness window for states and UTs that choose Option 1 to borrow the amount of the deficit arising from the implementation of the GST.
“The window has been operational since October 23, 2020 and the Government of India has already borrowed an amount of ₹Rs 30 billion on behalf of the States in five installments and passed on to the States and Union Territories, who chose Option 1, “the statement read.
Now, the Jharkhand government will also receive funds raised through this window from the next round of loans.
The next installment of ₹6,000 crore will be delivered to states / UT on December 7.
According to the ministry, under the terms of Option-1, in addition to obtaining the facility of a special window for loans to cover the deficit arising from the implementation of the GST, the states are also entitled to obtain unconditional permission to borrow the last installment of 0.50 percent. percent of the State Gross Domestic Product (GSDP) of the 2 percent additional loans allowed by the Government of India, under Atma Nirbhar Abhiyaan on May 17, 2020. This is beyond the Special Window of ₹1.1 million lakh rupees.
Upon receiving the choice of Option 1, the Government of India has granted an additional loan permit of ₹Rs 1,765 million for the Jharkhand state government (0.50 per cent of the Jharkhand GSDP).
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