New Delhi [India], November 25 (ANI): Governments of Kerala and West Bengal have communicated their acceptance of Option-1 to meet the revenue shortfall arising out of GST implementation. The number of States which have chosen this option has gone up to 25.
All the three Union Territories with Legislative Assembly (i.e. Delhi, Jammu and Kashmir and Puducherry) have also decided in favour of Option-1, according to an official release.
The States and Union Territories which choose Option-1 are getting the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Government of India.
The window has been operationalised since 23 October 2020 and the Government of India has already borrowed an amount of Rs 24,000 crore on behalf of the States in four instalments and passed it on to the States and Union Territories, who chose Option-1 on 23 October 2020, 2 November 2020, 9 November 2020 and 23 November 2020. Now the State of Kerala and West Bengal will also receive funds raised through this window starting from the next round of borrowings.
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 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the Government of India, under Atmnirbhar Abhiyaan on 17 May 2020.
This is over and above the Special Window of Rs 1.1 lakh crore. On receipt of the choice of Option-1 from the Government of Kerala and West Bengal, the Government of India has granted additional borrowing permission of Rs.4,522 crore to the State Government of Kerala (0.5 per cent of Kerala's GSDP) and Rs.6,787 crore to the State Government of West Bengal (0.5 per cent of West Bengal's GSDP). (ANI)