Chhattisgarh is the latest state to accept the Center’s loan option of Rs 1.1 lakh crore to cover the deficit of the Goods and Services Tax (GST) in 2020-21, making Jharkhand the only dissident.
“The Chhattisgarh government has communicated its acceptance of Option-1 to cover the revenue shortfall arising from the implementation of GST. The number of states that have favored Option 1 has risen to 27. All states, except Jharkhand and the 3 Union Territories (UT) with legislative assemblies, have decided in favor of Option 1, ”the Ministry said on Thursday of Finance of the Union.
Now, 30 GST council members, 27 states and 3 UTs, have formally accepted the first loan option proposed by the Center in August this year, reducing the number of dissenting states to just one, said a government official from the Union requesting anonymity.
At the 41st meeting of the GST Council on August 27, the Center had granted two loan options to the states to cover its income shortfall of approximately Rs 2.35 lakh crore in the current financial year. Two days later, it had specified that under the first option, states would not have to pay either the principal amount or the interest if they borrow only Rs 97,000 crore (then this amount was raised to Rs 1.1 lakh crore) to meet the income of the GST. deficit due to implementation problems. However, they would have to bear significant interest costs if they choose the higher debt option of Rs 2.35 lakh crore which includes income deficit due to an “act of God”, which was the Covid-19 pandemic.
Initially, 10 states (Chhattisgarh, Jharkhand, Kerala, Maharashtra, Delhi, Punjab, Rajasthan, Tamil Nadu, Telangana and West Bengal), mostly administered by parties outside the National Democratic Alliance (NDA), objected and insisted that the entire loan should be made. by the Center without imposing any direct interest burden on the States. They were.
Under the first option, the Union government established on October 23 a special borrowing window for this purpose and borrowed an amount of Rs 30,000 crore on behalf of the states, which was passed on to them.
“The funds borrowed through the special window were delivered to the States and UT on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020 and November 1, 2020. December 2020. Now the state of Chhattisgarh will also receive funds raised through this window from the next round of loans, ”the statement said.
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