As many as 13 states dominated by the BJP and events which have supported it on varied points have submitted their borrowing choices to the Centre to fulfill the GST income shortfall. These 13 states embody Bihar, Odisha, Andhra Pradesh, Gujarat, Uttarakhand and Meghalaya.
Six extra states – Goa, Assam, Arunachal Pradesh, Nagaland, Mizoram and Himachal Pradesh – might be giving their choice in a day or two, finance ministry sources stated.
Within the present fiscal, the states are watching a staggering Rs 2.35 lakh crore Items and Providers Tax (GST) income shortfall.
Of this, as per the Centre’s calculation, about Rs 97,000 crore is on account of GST implementation and relaxation Rs 1.38 lakh crore is the influence of COVID on states’ revenues.
The Centre late final month gave two choices to the states to borrow both Rs 97,000 crore from a particular window facilitated by the RBI or Rs 2.35 lakh crore from market and has additionally proposed extending the compensation cess levied on luxurious, demerit and sin items past 2022 to repay the borrowing.
Of the 13 states, 12 have most popular to go for borrowing from the particular window facilitated by the RBI. These states are AP, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Meghalaya, Sikkim,Tripura, UP, Uttarakhand and Odisha. Solely Manipur has thus far opted for borrowing from the market.
Nonetheless, the non-BJP dominated states are at loggerheads with the Centre over the problem of funding the shortfall.
Chief ministers of six non-BJP dominated states of West Bengal, Kerala, Delhi, Telangana, Chhattisgarh and Tamil Nadu have written to the Centre opposing the choices which require states to borrow to fulfill shortfall.
Sources stated just a few states as an alternative of expressing their choice choice have submitted their views to the Chairperson of the GST Council and are but to determine on the choices.
The GST Council in its 41st assembly on August 27, 2020, had given two borrowing choices to its member states to allow them to fulfill their compensation shortfall at “single charge” of curiosity on the RBI’s single window facilitated by the Finance Ministry.
Sources stated the Council additionally mentioned that within the present financial situation it will not be attainable to extend tax charges or do charge rationalisation to fulfill up the compensation shortfall. Nonetheless, borrowing could possibly be an choice to handle this problem.
The central authorities is dedicated to serving to the states to the utmost to fulfill the compensation shortfall by borrowing, they talked about.