Centre offers to borrow Rs 1.1 lakh crore and lend to states
NEW DELHI: The Centre will borrow the goods and services tax (GST) compensation shortfall of Rs 1.1 lakh crore, if all the states choose that option, and pass the amount on to them, marking a dramatic shift in stand that should resolve the row over the matter. The expectation is that the conciliatory move will bring the opposition-ruled states round.
After Monday’s GST Council meeting in which Union finance minister Nirmala Sitharaman told her state counterparts that the Centre would facilitate the borrowing through a special mechanism, the departments of revenue, expenditure and economic affairs had been asked to work out the contours of the process. The Centre was also in regular touch with the Reserve Bank of India (RBI) on the issue. “Hectic discussions were carried out over the past three days including with the minister to work out the mechanism,” said a government source aware of the deliberations.