In lieu of GST compensation, the way for states to borrow with the help of the central government has been cleared. The Finance Ministry has approved lending to 20 states. According to the information, these states will be able to get a total loan of Rs 68,825 crore.
This step has been taken after the GST Council meeting on Monday was not agreed on the issue of compensation. The lending will go to the states which have chosen the first of the two options given by the central government. The central government will help in borrowing from these states. And the amount will be repaid from the compensation cess collected after June 2022. According to the information given by the Finance Ministry, after this new arrangement, half a percent more money can be borrowed from the state’s gross domestic product. States that form part of this system include Andhra Pradesh, Arunachal Pradesh and Assam, although 10 non-BJP ruled states are still opposing it. States were given the option of borrowing Rs 1.1 lakh crore under the first option in the GST Council meeting. Out of this, Uttar Pradesh will be able to borrow Rs 9,703 crore, Uttarakhand Rs 1,405 crore, Bihar Rs 3,231 crore, Haryana Rs 4,293 crore.