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06/12/20 11:30 AM IST

All states choose option-1 to meet GST implementation shortfall

In news

All the 28 states and 3 union territories with legislature have decided to go for option-1 to meet the revenue shortfall arising out of the Goods and Services Tax (GST) implementation.

Highlights
  • Jharkhand became the latest state to go for Option 1. 
  • The state will receive ₹ 1,689 crore through a special borrowing window to meet the GST shortfall.
Option-1
  • The Central government has set up a special borrowing window for the states and the UTs who choose Option-1 to borrow the amount of shortfall arising out of GST implementation.
  • The window has been operationalised since 23rd October 2020
  • The Government of India has already borrowed an amount of ₹30,000 crores on behalf of the States in five installments and passed it on to the States and Union Territories, who chose Option-1
  • 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 instalment of 0.50 percent of Gross State Domestic Product (GSDP) out of the 2 percent additional borrowings permitted by the government, under Atma Nirbhar Abhiyaan

Source: PIB

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