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STATES GIVEN 2 OPTIONS ON GST COMPENSATION, MARKET BORROWING OR RBI : FINANCE MINISTER ON THURSDAY

After completion of day long 41st GST council meeting on Thursday finance minister Nirmala Sitharaman said states have two options on GST compensation: borrowing from the market or tapping the central bank or RBI. The states will “come back after seven working days” when another meeting of the council may be held. The coronavirus pandemic is an “act of God that may even lead to contraction in the economy” She said addressing the press. On the other hand addressing media Finance secretery said, The first Option presented to GST Council is to provide a special window to states, in consultation with RBI, to provide the ₹ 97,000 crores at a reasonable rate of interest, this money can then be repaid after 5 years from the collection of cess. The second option is if the entire GST compensation gap of Rs 2,35,000 crore of this year can be met by the states, in consultation with RBI, said finance secretery.

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