20 states allowed to borrow Rs 68Ok cr to fulfill GST shortfall

New Delhi, October 13

A day after the GST Council meeting ended in a stalemate, the Centre has allowed 20 states that had agreed with its formula for making up GST shortfall to raise Rs 68,825 crore through open market borrowings after waiving certain conditions it had stipulated in May.

The decision, being seen as a pressure tactic, leaves eight states, including Punjab, in suspense. In May, the Centre had allowed states to borrow two per cent of their GDP. But to borrow the final instalment of 0.5 per cent — Rs 68,825 crore — they had to fulfil three out of four reform conditions.

The Centre has now waived the condition for carrying out the reforms that included ending power subsidy to rural areas.

Haryana has been allowed to borrow Rs 4,293 crore and Himachal Pradesh Rs 877 crore. Punjab Finance Minister Manpreet Badal said at the resumed GST Council meeting on Monday that the Centre owes Punjab Rs 9,000 in GST compensation.The eight remaining states want the Centre to borrow and compensate them for the shortfall in GST dues. — TNS

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