Telangana becomes 23rd state by accepting Option-1 for GST sharing

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  • State will get Rs.2,380 crore through special borrowing window
  • Permission to get additional Rs.5,017crore through borrowings

The Government of Telangana has communicated its acceptance for Option-1 out of the two options suggested by the Ministry of Finance to meet the shortfall in revenue arising out of GST implementation.

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The State has now joined 22 other States and 3 Union Territories (Delhi, Jammu & Kashmir and Puducherry) who have opted for Option-1. The States 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 Government of India. The window has been operationalised now and the Government of India already borrowed an amount of Rs.18,000 crore on behalf of the States in three instalments and has passed it on to 22 States and 3 Union Territories on October 23, 2020, November 2 & 9, 2020 in 3 instalments. Now the Government of Telangana will receive funds raised through this window. The next instalment of borrowings is likely to be released on November 23, 2020. 

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 instalment of 0.50% of Gross State Domestic Product (GSDP) out of the 2% additional borrowings permitted by the Government of India, under Atmnirbhar Abhiyaan on May 17, 2020. This is over and above the Special Window of Rs.1.1 lakh crores. On receipt of the choice of Option-1 from the Government of Telangana, the Government of India has today granted the State Government of Telangana additional borrowing permission of Rs.5,017 crore (0.5% of Telangana’s GSDP).

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, Telangana, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand, along with the three Union Territories of Delhi, Jammu & Kashmir and Puducherry.

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