States' GST Revenue Shortfall Can Be Bridged by Monetising Debt, NSSF: SBI Report
4 years, 4 months ago

States' GST Revenue Shortfall Can Be Bridged by Monetising Debt, NSSF: SBI Report

News 18  

Economists at SBI on Friday proposed three options for states to raise resources to bridge the shortfall in GST revenue from the Centre. This can be done by the Reserve Bank monetising the state governments' debts, enlargement of Ways and Means Advances, or taking recourse to the National Small Savings Fund, they said. The SBI economists said even though the Centre has given the states the option to borrow as much as Rs 2.35 lakh crore, Article 293 of the Constitution imposes certain restrictions on the borrowings by state governments. Elaborating on their options, the economists said the option of RBI monetising the debt can be availed because the central bank is a banker to all state governments.

States Debt State Centre Rbi Gst Sbi State Governments Gst Revenue Nssf Wma  rate  debt  bridged  gst  special  revenue  centre  nssf  monetising  report  sbi  state  options  states  governments  rbi  shortfall  wma

History of this topic

Centre borrows and releases Rs 75,000 crore to compensate states for GST revenue shortfall
3 years, 5 months ago

Centre borrows and releases Rs 75,000 crore to compensate states for GST revenue shortfall

Firstpost  

Shortfall in GST compensation to states in the current fiscal estimated at Rs 2.59 lakh crore, of which about Rs 1.59 lakh crore would have to be borrowed New Delhi: The government has borrowed and given to the states Rs 75,000 crore to make up for the shortfall in their revenues because of the GST implementation. “The Ministry of Finance …

Centre to transfer second tranche of funds to states to meet GST shortfall
4 years, 2 months ago

Centre to transfer second tranche of funds to states to meet GST shortfall

Live Mint  

New Delhi: The central government said it release ₹6,000 crore to 16 states and three union territories on Monday under the special borrowing arrangement meant to meet states’ Goods and Services Tax revenue shortfall. So far, 21 states and three union territories have opted for the borrowing scheme to meet their GST revenue shortfall. States like Kerala, Punjab and West …

GST compensation: Govt transfers second tranche of ₹6,000 cr to 16 states, 3 UTs
4 years, 2 months ago

GST compensation: Govt transfers second tranche of ₹6,000 cr to 16 states, 3 UTs

Live Mint  

In a bid to bridge the Goods and Services Tax revenue shortfall, the Modi government has borrowed and transferred ₹6,000 crore as the second tranche to 16 states and three union territories under a special borrowing window, the Finance Ministry said on Monday. "The Ministry of Finance, Government of India, under its Special Window to States for meeting the GST …

Centre Transfers Rs 6,000 Crore in GST Compensation to States
4 years, 2 months ago

Centre Transfers Rs 6,000 Crore in GST Compensation to States

The Quint  

Last week, the Centre gave in to the demands of opposition-ruled states to borrow and fund the GST compensation shortfall. The GST council headed by Finance Minister Nirmala Sitharaman have met several times in the past few months but failed to come to a consensus on the issue of funding the shortfall of Goods and Services Tax revenue of states. …

Centre borrows ₹6,000 cr. for GST compensation
4 years, 2 months ago

Centre borrows ₹6,000 cr. for GST compensation

The Hindu  

Kicking off its borrowing plan to meet the GST compensation shortfalls faced by States, the Centre on Friday borrowed and transferred ₹6,000 crore to 16 States as well as the Union Territories of Delhi and J&K. As of now, 21 States had selected the Centre’s option to borrow ₹1.1 lakh crore out of the total ₹2.35 lakh crore GST compensation …

Centre Borrows, Transfers Rs 6,000 Crore to 16 States and 2 UTs
4 years, 2 months ago

Centre Borrows, Transfers Rs 6,000 Crore to 16 States and 2 UTs

News 18  

New Delhi: The Centre has borrowed and transferred Rs 6,000 crore as the first tranche of GST compensation shortfall to 16 states and two union territories, including Maharashtra, Gujarat, Bihar, Assam, Delhi and J&K, the finance ministry said on Friday. The finance ministry said that the Centre would borrow from the market to pay the GST compensation shortfall of Rs …

An incomplete solution: The Hindu Editorial on Centre borrowing for States to meet GST shortfall
4 years, 2 months ago

An incomplete solution: The Hindu Editorial on Centre borrowing for States to meet GST shortfall

The Hindu  

The past week witnessed some forward, albeit inexplicably delayed, movement towards breaking the deadlock between the Centre and States on bridging this year’s shortfall in cess collections to recompense States for adopting the GST. To recap — the Centre had argued that just ₹1.1-lakh crore of the estimated ₹2.35-lakh crore shortfall in GST cess inflows was due to GST implementation; …

Smart Arithmetic: Centre Agreeing to Take on GST Debt Should Help States' Finances
4 years, 2 months ago

Smart Arithmetic: Centre Agreeing to Take on GST Debt Should Help States' Finances

News 18  

The Centre has shown its arithmetic abilities in the game of one-upmanship with states over who foots the GST compensation shortfall in this pandemic year. “The most amicable way would have been not to offer two options but one straight option where entire GST shortfall was divided into two equal parts: one half to be borrowed by the Centre and …

GST: State welcomes offer, but wants to raise borrowing
4 years, 2 months ago

GST: State welcomes offer, but wants to raise borrowing

The Hindu  

Even while welcoming the Centre’s decision to borrow through a special window and provide back-to-back loans to the States in lieu of the Goods and Services Tax compensation, Kerala is putting pressure to borrow ₹1.70 lakh crore instead of the present offer of ₹1.1 lakh crore. Deferred payment “We have welcomed the Centre’s offer to borrow ₹1.1 lakh crore. Union …

After GST Shortfall Issue, Chidambaram Wants Centre to Work and 'Re-establish Trust with States'
4 years, 2 months ago

After GST Shortfall Issue, Chidambaram Wants Centre to Work and 'Re-establish Trust with States'

News 18  

After the Union government agreed to borrow Rs 1.10 lakh crore on behalf of states to meet the GST shortfall, Congress leader P Chidambaram said Friday that the Centre has taken the "correct first step" and it should now work to re-establish trust with them. "Having taken the correct first step, I urge the PM and the FM to take …

How Centre borrowing Rs 1.1 lakh crore will impact states, Nirmala Sitharaman explains in a letter
4 years, 2 months ago

How Centre borrowing Rs 1.1 lakh crore will impact states, Nirmala Sitharaman explains in a letter

Hindustan Times  

A day after the Centre announced that it would borrow Rs 1.1 lakh crore on behalf of the states — much to the relief of the states as now they don’t have to borrow to pay the GST compensation shortfall— finance minister Nirmala Sitharaman wrote to all states explaining the change in stance. The total GST revenue shortfall for the …

Centre reveals GST borrowing plan as states prep to move SC
4 years, 2 months ago

Centre reveals GST borrowing plan as states prep to move SC

Live Mint  

The central government on Thursday said it will borrow under a special Reserve Bank of India window and lend the money to states that opt for debt to bridge their revenue gap this fiscal arising from the indirect tax reform three years ago. An official statement issued by the finance ministry said the estimated shortfall of ₹1.1 trillion, assuming all …

Centre revises H2 borrowing calendar to accommodate GST compensation
4 years, 2 months ago

Centre revises H2 borrowing calendar to accommodate GST compensation

Live Mint  

The central government late on Thursday said it was modifying its borrowing calendar for the second half to operationalise a special borrowing window meant for states to bridge their Goods and Services Tax revenue gap. “To operationalize the special window to states for meeting the GST compensation cess shortfall of ₹1,10,000 crore, the government of India’s borrowing calendar is being …

After Deadlock Over GST Shortfall, Finance Ministry Says Centre to Borrow and Pass Amount to States
4 years, 3 months ago

After Deadlock Over GST Shortfall, Finance Ministry Says Centre to Borrow and Pass Amount to States

News 18  

Finance Ministry on Thursday said the central government will borrow Rs 1.1 lakh crore to make up for the shortfall in GST of states. If the centre has decided to borrow the Rs 1.1 lakh crore and extend it to the states as a back-to-loans, I welcome the change of position. — P. Chidambaram October 15, 2020 The second GST …

Amid Stalemate, Centre Permits 20 States to Raise Rs 68,825 Cr Via Borrowing to Meet GST Shortfall
4 years, 3 months ago

Amid Stalemate, Centre Permits 20 States to Raise Rs 68,825 Cr Via Borrowing to Meet GST Shortfall

News 18  

The Centre on Tuesday permitted 20 states to raise Rs 68,825 crore through open market borrowings to bridge the GST revenue shortfall. 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. The Department of Expenditure, …

No Consensus to Make up for GST Shortfall of States, Says FM Sitharaman after Council Meeting
4 years, 3 months ago

No Consensus to Make up for GST Shortfall of States, Says FM Sitharaman after Council Meeting

News 18  

The second GST Council meeting in a week, held on Monday, did not end the deadlock between opposition states and Centre, with Finance Minister Nirmala Sitharaman urging the states to opt for the first borrowing option. The two borrowing options given by the Centre to the states at an earlier GST meeting included: calculating GST related shortfall in revenue at …

GST Council meet ends with no consensus, Centre says will not borrow for states
4 years, 3 months ago

GST Council meet ends with no consensus, Centre says will not borrow for states

India Today  

The deadlock over compensating states for the shortfall in GST collections continued on Monday with the 42nd meeting of the GST Council ending without reaching any consensus. Finance Minister Nirmala Sitharaman, who heads the Council, said the Centre cannot borrow and pay states for the shortfall as it would lead to a rise in bond yields, resulting in the rise …

GST compensation due to States is ₹1.51 lakh cr.
4 years, 4 months ago

GST compensation due to States is ₹1.51 lakh cr.

The Hindu  

The GST collection during April-August declined on account of the COVID-19 induced lockdown, and the compensation due to States stands at over ₹1.51 lakh crore, Minister of State for Finance Anurag Singh Thakur said on Monday. The provisional GST compensation due to States and Union Territories for 2020-21 was highest for Maharashtra at ₹22,485 crore, followed by Karnataka, Uttar Pradesh, …

13 States Submit Borrowing Options to Centre to Fund GST Shortfall
4 years, 4 months ago

13 States Submit Borrowing Options to Centre to Fund GST Shortfall

News 18  

As many as 13 states ruled by the BJP and parties that have supported it on various issues have submitted their borrowing options to the Centre to meet the GST revenue shortfall. The Centre late last month gave two options to the states to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 …

GST compensation row: 13 states submit borrowing option to Centre to fund shortfall
4 years, 4 months ago

GST compensation row: 13 states submit borrowing option to Centre to fund shortfall

India TV News  

As many as 13 states ruled by the BJP and parties that have supported it on various issues have submitted their borrowing options to the Centre to meet the GST revenue shortfall. The Centre late last month gave two options to the states to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 …

Entire shortfall of compensation to states will be compensated: Sources
4 years, 4 months ago

Entire shortfall of compensation to states will be compensated: Sources

India TV News  

Days after government announced two options for States on the issue of meeting GST compensation, Finance Ministry sources on Monday said the entire shortfall of compensation to the states irrespective of whether it is on account of GST implementation or coronavirus pandemic will be compensated. Sources also said, the revenue accruing from GST compensation cess goes to the states and …

The Hindu Explains | What is the GST compensation due to States?
4 years, 4 months ago

The Hindu Explains | What is the GST compensation due to States?

The Hindu  

September 05, 2020 08:58 pm | Updated September 06, 2020 12:14 am IST The story so far: The 41st meeting of the GST Council was held on August 27 with the singular agenda of finding a solution to the question of how best to ensure that the compensation payable to the States as part of the implementation of the Goods …

Mamata Banerjee Writes to PM, Calls Govt’s Options for GST Shortfall 'Subterfuge and Betrayal of Trust'
4 years, 4 months ago

Mamata Banerjee Writes to PM, Calls Govt’s Options for GST Shortfall 'Subterfuge and Betrayal of Trust'

News 18  

Strongly rejecting the Centre’s suggestion that states can borrow to meet their current GST revenue shortfall, West Bengal Chief Minister Mamata Banerjee has written to Prime Minister Narendra Modi that the options given by the Centre are tantamount to a betrayal of the trust and moral responsibility of the government towards the states, equating the action to an attack on …

Seven states and Puducherry reject Centre's proposal of states borrowing to make up for GST shortfall
4 years, 4 months ago

Seven states and Puducherry reject Centre's proposal of states borrowing to make up for GST shortfall

Firstpost  

The Centre last week gave states the options to borrow either from a special window facilitated by the RBI or from the market and also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 As many as seven non-BJP ruled states, including Kerala and Punjab, besides Union Territory Puducherry on Monday rejected the Centre’s suggestion …

'Difficult, Expensive': In Letter to PM Modi, Tamil Nadu CM Lists Problems With 'States Should Borrow' Plan
4 years, 4 months ago

'Difficult, Expensive': In Letter to PM Modi, Tamil Nadu CM Lists Problems With 'States Should Borrow' Plan

News 18  

The Centre has a moral and legal obligation to pay compensation for the shortfall in GST collections and asking States to borrow from the market is administratively difficult to implement and more expensive, Chief Minister K Palaniswami asserted on Monday. The Union Finance Ministry should agree to a mechanism in which the government of India raises the required funds as …

Kerala Rejects Centre's Proposal of Borrowing by States to Meet GST Shortfall
4 years, 4 months ago

Kerala Rejects Centre's Proposal of Borrowing by States to Meet GST Shortfall

News 18  

Kerala will reject “lock, stock and barrel” the Centre’s proposal of borrowing by states to meet GST revenue shortfall, state finance minister Thomas Isaac said on Monday. The Centre and opposition-ruled states like Punjab, Kerala, Delhi and West Bengal, are at loggerheads over the financing of the Rs 2.35 lakh crore Goods and Services Tax shortfall in the current fiscal. …

'In the Name of Act of God, Centre Has Thrust Huge Debt on States': Bengal FinMin on GST Compensation
4 years, 4 months ago

'In the Name of Act of God, Centre Has Thrust Huge Debt on States': Bengal FinMin on GST Compensation

News 18  

West Bengal Finance Minister Amit Mitra on Sunday dubbed the Centre’s decision to grant two borrowing options to the states due to the estimated GST shortfall of approximately Rs 3 lakh crore in FY 2020-21, a “repeated act of distrust”. “They have given us two options: to borrow Rs 97,000 crore ; borrow the entire Rs 2.35 lakh crore,” Mitra …

Centre Writes to States Suggesting Options of Borrowing Money to Make Up for GST Shortfall
4 years, 4 months ago

Centre Writes to States Suggesting Options of Borrowing Money to Make Up for GST Shortfall

News 18  

The central government on Saturday wrote to states suggesting options of borrowing money to make up for the Rs 2.35 lakh crore shortfall in GST revenues expected in the ongoing fiscal. Two days after first suggesting to states to borrow money to make up for the shortfall at the GST Council meeting, the finance ministry wrote to state governments saying …

Borrow from RBI to bridge GST gap, Centre tells States
4 years, 4 months ago

Borrow from RBI to bridge GST gap, Centre tells States

The Hindu  

The Centre on Thursday acknowledged that States are likely to face a GST revenue gap of ₹3 lakh crore this year, as the economy may contract due to COVID-19, which Finance Minister Nirmala Sitharaman termed an unforeseen “act of God”. “You are facing an act of God, which might even result in a contraction of the economy — to what …

States shouldn’t be asked to borrow from market to fund GST shortfall: West Bengal FM to Nirmala Sitharaman
4 years, 4 months ago

States shouldn’t be asked to borrow from market to fund GST shortfall: West Bengal FM to Nirmala Sitharaman

The Hindu  

West Bengal Finance Minister Amit Mitra on Tuesday wrote to Union Finance Minister Nirmala Sitharaman saying States should not be asked to borrow from the market to make good the shortfall in GST revenue collection. In case of shortfall it is the responsibility of the Centre to garner resources for fully compensating the States, as per the formula agreed upon …

Set Up GST Council Type Authorities for Land, Labour, Power to Drive Structural Reforms: RBI
4 years, 4 months ago

Set Up GST Council Type Authorities for Land, Labour, Power to Drive Structural Reforms: RBI

News 18  

The Reserve Bank on Tuesday suggested setting up GST Council type apex authorities for land, labour and power to drive structural reforms and expedite implementation of national infrastructure pipeline. "In fact, Goods and Services Tax Council type of apex authorities can be set up in respect of land, labour and power to drive structural reforms," RBI said in its 2019-20 …

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