Centre permits 20 states to raise Rs 68,825 cr via borrowing to meet GST shortfall

NEW DELHI: The Centre on Tuesday permitted 20 states to raise Rs 68,825 crore through open market borrowings to bridge the GST revenue shortfall.

The decision came a day after the GST Council meeting failed to reach a consensus on the stalemate over the Centre’s proposal of states borrowing against future GST collections to make up for the shortfall.

The projected total compensation shortfall in the current fiscal stands at Rs 2.35 lakh crore.

The Centre had in August given two options to the states — to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 lakh crore from the market. It had also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing. (AGENCIES)