GST Row: Cong-Ruled Rajasthan Opts for Borrowing Option 1

Rajasthan has now joined 21 other states and 3 Union Territories which have opted for Option-1.

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Rajasthan on Thursday, 5 November became the first Congress-ruled state to opt for Option 1 of the borrowing plan to meet GST Compensation shortfall.

The finance ministry said:,“The payment of a back-to-back loan to Rajasthan will be made available soon,” Moneycontrol reported.

“State will get Rs.4,604 Cr through special borrowing window and also permission to raise additional Rs.5,462 Cr through borrowings,” Ministry of Finance tweeted.


With this, Rajasthan has now joined 21 other states and 3 Union Territories (Delhi, Jammu & Kashmir and Puducherry), which have opted for Option-1.

The window has been operationalised now and the Government of India already borrowed an amount of Rs.12,000 crores on behalf of the States in two instalments and has passed it on to 21 States and 3 Union Territories on 23 October 2020 and 2 November 2020.

Now the government of Rajasthan will receive funds raised through this window.  The next installment of borrowings is likely to be released on 9 November 2020, the statement by Finance Ministry further read.

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, states are also entitled to get unconditional permission to borrow the final installment of 0.50 percent of Gross State Domestic Product (GSDP) out of the 2 percent additional borrowings permitted by the government of India, under Aatmanirbhar Abhiyaan on 17 May 2020.

This is over and above the special window of Rs 1.1 lakh crore, reported IANS.

On receipt of the choice of Option-1 from the Rajasthan government, the Centre on Thursday granted the state additional borrowing permission of Rs 5,462 crore (0.5 per cent of Rajasthan's GSDP).

States That Opted for Option -1

States who have opted for Option-1 are – Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand, along with the three Union Territories of Delhi, Jammu & Kashmir and Puducherry, Ministry of Finance mentioned in its press release.

(With inputs from IANS)

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