Government of Chhattisgarh has communicated its acceptance of Option-1 to meet the revenue shortfall arising out of GST implementation. The number of States which have favoured Option-1 has gone up to 27. All States except Jharkhand and all the 3 Union Territories with Legislative Assembly have decided in favour of Option-1.
The States and Union Territories which choose Option-1 are getting the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Central Government. The window has been operationalised since 23rd of October this year. The Centre has already borrowed an amount of 30 thousand crore rupees on behalf of the States in five installments. The amount has been passed on to the States and Union Territories, who chose first Option.
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, the States are also entitled to get unconditional permission to borrow the final installment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the centre.