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Telangana opts for Option 1 to meet GST shortfall, joins 22 other states

The Union Ministry of Finance informed that Telangana has opted for Option-1 suggested by the Ministry to meet the shortfall in revenue arising out of GST implementation

Goods and Services Tax | GST | Telangana

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The Union Ministry of Finance informed that has opted for Option-1 suggested by the Ministry to meet the shortfall in revenue arising out of implementation.

has now joined 22 other States and three Union Territories (Delhi, Jammu-Kashmir, and Puducherry) who have opted for the same option.

The state will get Rs 2,380 crores through a special borrowing window and also permission to raise additional Rs 5,017 crores through borrowings, the Finance Ministry said.

According to the ministry, the states who choose Option-1 are getting the amount of shortfall arising out of implementation through a special borrowing window put in place by the Government of India (GoI).

The window has been operationalised now and the GoI already borrowed an amount of Rs 18,000 crores on behalf of the states in three installments and has passed it on to 22 States and three Union Territories on October 23, November 2, and November 9, 2020.

Now, the government will also receive funds raised through this window.

"The next installment of borrowings is likely to be released on November 23, 2020," read a release by the Ministry of Finance.

"Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of implementation, states are also entitled to get unconditional permission to borrow the final installment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the two per cent additional borrowings permitted by the GoI, under AtmnirbharAbhiyaan on May 17, 2020. This is over and above the Special Window of Rs 1.1 lakh crores," it said.

On receipt of the choice of Option-1 from Telangana, the GoI on Tuesday granted the State Government of Telangana additional borrowing permission of Rs 5,017 crores (0.5 per cent of Telangana's GSDP).

Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Telangana, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand, along with the three Union Territories of Delhi, Jammu-Kashmir and Puducherry have opted for Option-1.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, November 18 2020. 09:22 IST