Goa, which faces a Goods and Services Tax (GST) shortfall, presently estimated at Rs 1,018 crore, has opted for market borrowing through the Reserve Bank of India’s (RBI) special window to meet the shortfall, said Panchayat Minister Mauvin Godinho on Wednesday.
Godinho, who represents the state in the central GST Council, said around 15 states have opted for the “RBI’s special window” to fund the deficit in GST revenue and Goa is one among them.
“The Chief Minister, Pramod Sawant, has written to Finance Minister selecting option 1 – funding the shortfall by borrowings through the RBI’s special window,” said Godinho. He said a request has also been put in to pay the GST dues first to the smaller states.
“There is already more than Rs 15,000 crore lying in the Centre’s GST kitty. At least smaller states should be given funds earlier than the bigger states because their demand is less. We have asked the Centre for early devolution. The GST Council is considering our request after which the government will take a call on whether it can manage on the funds given by the Centre,” he said.
Godinho said that the amount of the market borrowing will be “to a limited extent” and is to be decided by the finance department.
A GST Council meeting was supposed to take place on September 19, for states to convey their decision on funding of the shortfall. It will now be held on October 5, said the minister.
The GST revenue shortfall for all states in the current year 2020-21 is estimated at a whopping
Rs 2.35 lakh crore. Of this, as per the Centre’s calculation, about Rs 97,000 crore is a result of the GST system itself, while the remaining Rs 1.38 lakh crore is because of the pandemic crisis.
Speaking to ‘The Navhind Times’, Godinho explained that states have been given two options, funding the shortfall by borrowing from a special window facilitated by the RBI or borrowing directly from the market. Around five states, as of now, have chosen the second option, he said.
He said as per the GST law, the Centre has to pay states shortfall in GST collection for a period of five years. “COVID-19 created a force majeure situation and badly hit the GST revenues of all the states. As against a protected revenue of Rs 350 crore every month, Goa is witnessing a deficit every month because of which the accrued dues for the current year 2020-21 stand at Rs 1,018 crore,” said Godinho.