21 States now allowed to mobilize Rs.78,452 crore to meet the shortfall arising out of GST implementation

Last updated: 15 October 2020

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Twenty-one states, including Tamil Nadu, have been granted permission to borrow a combined Rs.78,452 crore to address revenue shortfalls caused by GST implementation. This borrowing is in addition to a previously announced Rs.1.1 lakh crore facility. States opting for 'Option-1' are eligible for this borrowing at 0.50% of their Gross State Domestic Product (GSDP), which also allows them access to a further 0.50% borrowing under the Atmanirbhar Abhiyaan scheme.

Tamil Nadu goes for Option-1, gets permission to borrow an additional amount of Rs 9,627 crore 21 States now allowed to mobilize Rs.78,452 crore in addition to Rs 1.1 lakh crore to meet the shortfall arising out of GST implementation The Department of Expenditure, Ministry of Finance, has toda

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FAQ :

These 21 states are now allowed to mobilise an additional Rs.78,452 crore.

Option-1 allows states to borrow funds through open market borrowings, facilitated by a special window created by the Ministry of Finance. It also grants unconditional permission for the final 0.50% of GSDP borrowing under the Atmanirbhar Abhiyaan.

As of now, 21 states and 2 Union Territories (Delhi and Jammu & Kashmir) have requested and been granted permission under Option-1. Yesterday, 20 states received permission, and today Tamil Nadu was also granted permission.

Yes, the permission to mobilise Rs 78,542 crore is over and above the Rs 1.1 lakh crore special window already available to states.

The additional borrowing permission is granted at 0.50% of the Gross State Domestic Product (GSDP) for states that have opted for Option-1.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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21 States now allowed to mobilize Rs.78,452 crore to meet the shortfall arising out of GST implementation