The Expenditure Department of the Ministry of Finance has granted permission to Tamil Nadu to collect an additional amount of ₹Rs 9,627 crore through open market loans on Wednesday. The permit was granted to Tamil Nadu after the state formally communicated its acceptance of Option 1 to cover the shortfall arising from the implementation of the GST.
So far, 21 states and two Union Territories, including Delhi and Jammu and Kashmir, have applied for Option 1.
The Finance Ministry allowed 20 states to increase ₹Rs 68.825 crore through loans to cover GST’s revenue shortfall. This comes a day after the Goods and Services Tax Council (GST) met on Monday without reaching a consensus on compensation from the states.
An additional debt permit at 0.50% of the State’s Gross Domestic Product (GSDP) has been granted to those states that have opted for Option 1 of the two options suggested by the Ministry of Finance to cover the deficit arising from the implementation of the GST.
With today’s permission, 21 states have been granted permission to mobilize ₹78,542 crore as of now.
The loan permit granted to the 21 states is above the loan permit of about ₹Rs 1.10 million lakh will be issued to enable states to cover the revenue shortfall arising from the implementation of the GST. The Ministry of Finance is creating a special window to facilitate this indebtedness.
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, States are also entitled to obtain unconditional permission to borrow the final payment of 0 , 50% of the GSDP of the 2% additional loans allowed by the Government of India, under Atmanirbhar Abhiyaan on May 17, 2020. This is beyond the special window of ₹1.1 million lakh rupees.
Twenty states that were granted permission yesterday were: 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.
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