Rajasthan has become first Congress-ruled State to go for Option-1 to meet the GST compensation shortfall. Overall, it is the second among the four Congress-ruled States and Union Territory (with legislature), as Puducherry joined earlier.
With this, the total number of States going for Option 1 has reached 22 along with all three UT with legislature. Out of these, 17 States and three UTs will get benefit from borrowing to meet the GST compensation shortfall. However, all 22 States will be entitled to get unconditional permission to borrow the final instalment of 0.5 per cent of the GSDP out of the 2 per cent additional borrowings permitted by Centre under the ‘Atmanirbhar Abhiyaan’ on May 17.
Now, only Punjab, Chattisgarh, West Bengal, Telangana, Kerala and Jharkhand are yet to take a call on the option as was proposed by the Centre during the GST Council Meeting. The Centre has already conducted borrowing of two tranches amounting to ₹12,000 crore and transferred the same to States/UTs which have opted for Option 1. Seventeen States and three UTs are getting money borrowed. The Centre has said that it will borrow ₹6,000 crore every Monday and transfer the amount to States/UTs.
Special window
Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of the GST implementation, States are also entitled to get additional unconditional permission to borrow 0.5 per cent of GSDP. This is over and above the special window of ₹1.1 lakh crore.
On receipt of the choice of Option-1 from Rajasthan, the Centre on Thursday granted the State government additional borrowing permission of ₹5,462 crore (0.5 per cent of its GSDP).