Telangana goes in for Option 1 to meet GST shortfall

Hyderabad : The Telangana government has decided to go for Option – 1 to meet the GST implementation shortfall in the revenues. The State government has communicated its acceptance for Option-1 out of the two options suggested by the Union Ministry of Finance to meet the shortfall in revenue arising out of GST implementation.

Under the Option-1, the Telangana will get Rs 2,380 crore through special borrowing and also permitted to raise additional Rs 5,017 crore through borrowings. Telangana joined 22 other States and three Union Territories (Delhi, Jammu & Kashmir and Puducherry) who have also opted the Option-1.

The States who choose Option-1 will get the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Union government. The window has been operationalised now and the Centre already borrowed an amount of Rs 18,000 crore on behalf of the States in three instalments and has passed it on to the States.

The Telangana government will also receive funds raised through this window. 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, States are also entitled to get unconditional permission to borrow the final instalment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings under Atmanirbhar Abhiyaan.