Tamil Nadu gets permission to borrow additional amount of Rs 9,627 crore

The Department of Expenditure under Ministry of Finance on Wednesday 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 one to meet the shortfall arising out of GST implementation. A total of 21 states and two union territories -- Delhi and Jammu and Kashmir -- have so far requested for option one.

A day earlier, the Department of Expenditure issued permission to 20 states to raise an additional amount of Rs 68,825 crore through open market borrowings. With today's permission, 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 them 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 current additional borrowing permission has been granted at the rate of 0.5 per cent of the gross state domestic product (GSDP) to those states who have opted for option one out of the two options suggested by the Ministry of Finance.

Under the terms of option one, 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 per cent of GSDP out of the 2 per cent additional borrowings permitted by the government under Aatmanirbhar Abhiyaan on May 17.

This is over and above the special window of Rs 1.1 lakh crore, said an official statement.

The 20 states who were granted permission yesterday 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.