The Union finance ministry on Saturday formally proposed two options for borrowings to meet the shortfall of of Rs 2.35 lakh crore in good...
The Union finance ministry on Saturday formally proposed two options for borrowings to meet the shortfall of of Rs 2.35 lakh crore in goods and service tax compensation for the financial year of 2020-’21 to states. The states have been given seven days to examine the options and revert with their choice.
At the end of the five-hour long 41st GST Council meeting on Thursday, Union Finance Minister Nirmala Sitharaman briefed the media to say that states have been offered two borrowing options to make up for the revenue shortfall under the Goods and Services Tax. The finance ministry has estimated this shortfall at Rs 2.35 lakh crore in the financial year 2020-’21 because of the severe impact of the pandemic.
The first option is that the states may borrow the full compensation deficit of Rs 2.35 lakh crore via a special window in consultation with the RBI. The second option entailed borrowing the entire projected shortfall of Rs 2.35 lakh crore this year, facilitated by the central bank.
In a statement released on Saturday, the finance ministry shared the details of the proposal and said states can individually choose one of the options according to their compensation, borrowing and repayment capacities. The ministry said it will...
