Telangana has accepted Option-1 out of the two options suggested by the Ministry of Finance to meet the shortfall in revenue arising out of GST implementation. The State has now joined 22 other States and three Union Territories (Delhi, Jammu and Kashmir and Puducherry) who have opted for Option-1. Under this plan, Telangana will get Rs.2,380 crore through special borrowing window and also permission to raise an additional Rs.5,017 crore through borrowings.
The States who choose Option-1 get the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Central Government. The window has been operationalised now and the Government of India has already borrowed Rs.18,000 crore on behalf of the States in three instalments and passed it on to 22 States and three Union Territories on October 23, November 2 and 9. 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.
Under the terms of Option-1, States are also entitled to unconditional permission to borrow the final instalment of 0.50% of Gross State Domestic Product (GSDP) out of the 2% additional borrowings. This is over and above the Special Window of Rs.1.1 lakh crore. On receipt of the choice of Option-1from Telangana, the Union Government on Wednesday granted the 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.