GST compensation shortfall | Jharkhand has accepted possibility, says Finance Ministry
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State will get ₹1,689 crore, with permission to borrow an extra ₹1,765 crore
Jharkhand has accepted the choice supplied by the Centre to fulfill a part of the GST compensation shortfall via a particular borrowing window, the Finance Ministry stated on Saturday.
Also learn | Explained: What is the GST compensation because of States?
With Jharkhand’s acquiescence to the Centre’s proposed answer, all States and Union territories have now exercised the choice to obtain a part of their GST implementation dues this yr. Jharkhand will get ₹1,689 crore to fulfill the GST implementation shortfall, with permission to borrow an extra ₹1,765 crore.
The Centre had supplied States the choice of borrowing ₹1.1 lakh crore out of the estimated ₹2.35 lakh crore shortfall in compensation dues payable to States for this yr. After initially asking States to undertake the borrowings themselves, the Centre had later supplied to borrow on States’ behalf and lend it onwards.
Over the previous two weeks, many of the States that had reservations with the Centre’s proposed association, together with Kerala, West Bengal and Punjab, have communicated their acceptance of Option-1. On Thursday, Chhattisgarh additionally got here on board.
So far, ₹30,000 crore has been raised in 5 instalments via the particular borrowing window that was operationalised in late October.
“Now the State of Jharkhand will also receive funds raised through this window starting from the next round of borrowing. The next instalment of ₹6,000 crore will be released to the States/UTs on December 7, 2020,” the Finance Ministry stated in a press release.
All repayments for these particular borrowings might be paid from future collections of GST cess, whose validity has been prolonged past the initially envisaged sundown date of June 2022.
The States accepting the Centre’s formulation for resolving the GST compensation dues for this yr are additionally entitled to get unconditional permission to borrow 0.50% of Gross State Domestic Product (GSDP).
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