Finance InFocus

Punjab Chooses Option-1 to Meet the GST Implementation Shortfall

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, the 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 AtmnirbharAbhiyaan on 17th May, 2020.

SMEStreet Edit Desk

28 Nov 2020 11:55 IST

New Update

Governments of Punjab has communicated acceptance of Option-1 to meet the revenue shortfall arising out of GST implementation. The number of States who have chosen this option has gone up to 26. All the 3 Union Territories with Legislative Assembly (i.e. Delhi, Jammu & Kashmir and Puducherry) have also decided in favour of Option-1.

The States & Union Territories 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 operationalisedsince 23^rd October, 2020 and the Government of India has already borrowed an amount of Rs.24,000 crores on behalf of the States in four instalments and passed it on to the States and Union Territories, who chose Option-1on 23^rd October, 2020, 2^nd November, 2020, 9^th November, 2020 and 23^rd November, 2020. Now the State of Punjab will also receive funds raised through this window starting from the next round of borrowing.

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, the 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 AtmnirbharAbhiyaan on 17^th May, 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 Punjab, the Government of India has granted additional borrowing permission of Rs.3,033 crores to the State Government of Punjab(0.5% of Punjab’s GSDP).

The amount of additional borrowing permission granted to 26 States and the amount of funds raised through special window and released to the 18 States and 3 Union Territories so far is annexed.

Statewise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTstill 28.11.2020

(Rs. in Crore)

S. No.	Name of State / UT	Additional borrowing of 0.50 percent allowed to States	Amount of fund raised through special window passed on to the States/ UTs
1	Andhra Pradesh	5051	672.61
2	Arunachal Pradesh*	143	0.00
3	Assam	1869	289.54
4	Bihar	3231	1136.27
5	Goa	446	244.39
6	Gujarat	8704	2683.88
7	Haryana	4293	1266.68
8	Himachal Pradesh	877	499.74
9	Karnataka	9018	3611.17
10	Kerala#	4,522	0.00
11	Madhya Pradesh	4746	1321.98
12	Maharashtra	15394	3486.24
13	Manipur*	151	0.00
14	Meghalaya	194	32.51
15	Mizoram*	132	0.00
16	Nagaland*	157	0.00
17	Odisha	2858	1112.42
18	Punjab #	3033	0.00
19	Rajasthan	5462	645.06
20	Sikkim*	156	0.00
21	Tamil Nadu	9627	1816.66
22	Telangana	5017	164.41
23	Tripura	297	66.04
24	Uttar Pradesh	9703	1748.29
25	Uttarakhand	1405	674.27
26	West Bengal #	6787	0.00
	Total (A):	103273	21472.16
1	Delhi	Not applicable	1706.93
2	Jammu & Kashmir	Not applicable	661.21
3	Puducherry	Not applicable	159.70
	Total (B):	Not applicable	2527.84
	Grand Total (A+B)	103273	24000.00

* These States have ‘NIL’ GST compensation gap

# Funds will be released starting after next round of borrowing.

GST Punjab