GST shortfall situation becomes clearer, govt may have to borrow $22 billion more to pay states
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GST shortfall situation becomes clearer, govt may have to borrow $22 billion more to pay statesBy Vrishti Beniwal and Subhadip Sircar, Bloomberg
Last Updated: May 26, 2021, 12:55 PM IST
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Any additional borrowing will replicate an arrangement followed last financial year, where New Delhi borrowed Rs 1.1 lakh crore on behalf of the states and passed them on as back-to-back loans, the people said. The decision on the extra borrowing, the amount and the timing would be made after consulting with the Reserve Bank of India and states.
Read more about Centre may need to borrow Rs 1.6 trn more to pay states for revenue loss on Business Standard. The government is expected to muster only Rs 1.1 trillion as it borrows more for a second year straight.
Centre may need to borrow $22 billion more to pay States
Bloomberg
May 26 |
Updated on
May 26, 2021
India may need to borrow more for a second straight year to compensate its States for their revenue loss due to a shortfall in a nationwide consumption tax collection, according to sources.
The additional borrowing requirement is estimated at Rs 1.58 trillion ($21.7 billion) in the fiscal year started April 1, said the sources , who asked not to be identified citing rules. A panel on goods and services tax will meet on Friday to discuss compensation to States, among other issues.
While the amount to be paid to states works out to Rs 2.7 trillion, the government is expected to muster only Rs 1.1 trillion, the sources said. Calls made to a Finance Ministry spokesperson weren’t immediately answered.
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