New Delhi: The governments of Kerala and West Bengal have now accepted Option 1 to meet the revenue shortfall arising out of GST implementation. With this, the number of states who have chosen this option has gone up to 25.
All the three Union Territories with Legislative Assembly (i.e. Delhi, Jammu & Kashmir and Puducherry) have also decided in favour of Option 1.
The states and Union Territories who choose Option 1 are getting the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Centre.
The window has been operationalised since October 23, and the Centre 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 October 23, November, 2, 9 and 23.
Now, Kerala and West Bengal will also receive funds raised through this window starting from the next round of borrowings, a government statement said.
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 Centre, under the Aatmanirbhar Abhiyaan on May 17. This is over and above the special window of Rs.1.1 lakh crore.
On receipt of the choice of Option 1 from the governments of Kerala and West Bengal, the Centre has granted additional borrowing permission of Rs 4,522 crore to Kerala (0.5 per cent of Kerala’s GSDP) and Rs 6,787 crore to West Bengal (0.5 per cent of West Bengal’s GSDP).
