Tamil Nadu became the 21st state to opt for option 1 to meet the Goods and Services Tax (GST) revenue shortfall and the Centre granted permission to Tamil Nadu to raise an additional amount of Rs 9,627 crore through open market borrowings.
"The permission was issued after the state formally communicated its acceptance for Option-1 to meet the shortfall arising out of GST implementation. 21 states and 2 Union Territories, Delhi and Jammu & Kashmir have so far requested Option 1," the government said in a press release.
The Centre issued permission to 20 states on October 13 to raise an additional amount of Rs 68,825 crore through open market borrowings. Now, 21 states have been granted permission to mobilise Rs 78,542 crore so far.
"The borrowing permission issued to the 21 states is over and above the borrowing permission of around Rs 1.10 lakh crore to be issued to enable the states to meet the revenue shortfall arising out of GST implementation. A special window is being created by the Ministry of Finance to facilitate this borrowing," the government said.
The current additional borrowing permission has been granted at 0.50 percent of the Gross State Domestic Product (GSDP) to those states who have opted for Option-1 out of the two options suggested by the Centre.
Besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, states are also entitled to get unconditional permission to borrow the final instalment of 0.50 percent of GSDP out of the 2 percent additional borrowings permitted by the Centre, under the terms of Option-1.Twenty states who were granted the permission on October 13 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.