NEW DELHI, Dec 5: With Jharkhand also falling in line, all the 28 States and three Union Territories with legislature have decided to go for Option-1 to meet the revenue shortfall arising out of the GST implementation. Jharkhand, the only remaining State, has now communicated its acceptance of Option-1. All the three Union Territories with Legislative Assembly who are members of the GST council have already decided in favour of Option-1.
The central government had set up a special borrowing window for the States & Union Territories who choose Option-1 to borrow the amount of shortfall arising out of GST implementation. The window has been operationalised since October 23 and the centre has already borrowed an amount of Rs.30,000 crore on behalf of the states in five installments and passed it on to the States and Union Territories, who chose Option-1. Jharkhand will also now receive funds when the next installment of Rs.6,000 crore will be released to the States/UTs on December 7.
Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the States are also entitled to get unconditional permission to borrow the final installment of 0.50% of Gross State Domestic Product (GSDP) out of the 2% additional borrowings permitted by the Government of India, under Atma Nirbhar Abhiyaan on 17th May, 2020. This is over and above the Special Window of Rs.1.1 lakh crore. On receipt of the choice of Option-1, the Government of India has granted additional borrowing permission of Rs.1,765 crore to the State Government of Jharkhand (0.50 % of Jharkhand’s GSDP).
(Manas Dasgupta)