At least 13 states have submitted their borrowing options to the Centre to meet the GST revenue shortfall. Of the 13 states, 12 have opted for borrowing through the issue of debt under Special Window facilitated by RBI.
Goa, Assam, Arunachal Pradesh, Nagaland, Mizoram and Himachal Pradesh will submit their option in a day or two, finance ministry sources told news agency PTI.
At the 41st GST Council meeting on August 27, Finance Minister Nirmala Sitharaman gave states two options under which they could borrow from the market to make up for the estimated deficit of Rs 2.35 lakh crore in FY21, created due to the economic losses caused by COVID-19.
In the first option, states would have to borrow Rs 97,000 crore through issue of debt under RBI's Special Window coordinated by the Ministry of Finance. In case of the second option, the entire shortfall of Rs 2.35 lakh crore may be borrowed by states through the issue of market debt.
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Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Meghalaya, Sikkim, Tripura, UP, Uttarakhand and Odisha have preferred to opt for borrowing from the special window facilitated by the RBI. So far, only Manipur has so far opted for borrowing from the market.
Meanwhile, Chief Ministers of six non-BJP ruled states of West Bengal, Kerala, Delhi, Telangana, Chhattisgarh and Tamil Nadu have written to the Centre opposing the options which require states to borrow to meet the shortfall.
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"Senior state government officials had a meeting with finance ministry officials. We were explained the two options. But the issue is the Centre is only explaining their position and not listening to why neither is feasible to us. If they want us to borrow, then we need FRBM (Fiscal Responsibility and Budget Management) limits to be adequately raised," a senior state government official had earlier told Moneycontrol.
Under GST law, states were guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017.