Tamil Nadu gets Centre's nod to borrow Rs 9,627 cr from market to plug GST revenue hole

Centre on Wednesday gave its d to Tamil Nu to raise an ditional amount of Rs 9,627 crore through open market borrowings to cover shortfall in GST dues.

permission to borrow amount was issued by  Department of Expenditure after state formally communicated its acceptance for 'Option-1' to meet shortfall arising out of GST implementation, Union Finance Ministry said in a statement.

government has so far given its d to 21 states and two Union Territories to raise an ditional amount of Rs 78,542 crore through open market borrowings.  permission is over and above borrowing permission of around Rs 1.10 lakh crore to be issued to enable states to meet revenue shortfall arising out of GST implementation. A special window is being created by Ministry of Finance to facilitate this borrowing.

According to Finance Ministry, current ditional borrowing permission has been granted at 0.50% of Gross State Domestic Product (GSDP) to those states who have opted for Option-1 out of two options suggested by Centre. Under terms of Option-1, besides getting facility of a special window for borrowings to meet shortfall arising out of GST implementation, states are also entitled to get unconditional permission to borrow final installment of 0.50% of GSDP out of 2% ditional borrowings permitted by Centre, under Atmanirbhar Bharat Abhiyaan. This is over and above Special Window of Rs 1.1 lakh crore.

21 states, run mostly by BJP and its allies, that have availed borrowing facility are Andhra Presh, Arunachal Presh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Presh, Karnataka, Mhya Presh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Tamil Nu, Uttar Presh and Uttarakhand.

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Earlier this month, Finance Ministry said re h been credible signs of ecomic progress in month of September after ecomic slump due to COVID-19 pandemic and consequential lockdown, ding that government is always rey to take any furr measure necessary to reduce sufferings of people.

phased relaxation of lockdown has led to ecomy gaining momentum to be back on track with GST collection of Rs 95,480 crore in September which is up by 4% year-on-year.

Recently, Comptroller and Auditor General (CAG) observed that Modi government retained Rs 47,272 crore of GST Compensation Cess collected in Consolidated Fund of India during 2017-18 and 2018-19. This came in for a lot of criticism from opposition parties. 

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