BENGALURU: The Union government on Tuesday granted permission to Karnataka to borrow Rs 9,018 crore to offset GST compensation losses. Karnataka was one of the first states to push for open market borrowing under Option 1 provided by the GST Council. On Tuesday’s GST Council meeting, state’s representative and Home Minister Basavaraj Bommai highlighted the immediate need for compensation as the state is hard-pressed for investment in both plan and non-plan expenditure. The Centre has approved borrowings barely a day after.
“The Government of India showed its commitment by reducing the estimated growth from 10 per cent to 7 per cent, which will provide an additional loan facility of Rs 1,000 crore to the State Government from Rs 11,432 crore to Rs 12,400 crore,” Bommai said.
Karnataka had even suggested that the Council can recommend to the Centre to permit states to borrow as per the provisions of Article 279 (4) (h) of the Constitution. Insisting that additional borrowing will not burden the state, Bommai had said, “Who repays is more important than who borrows. Under this option, the repayment of both principal and the interest is done from the cess collected in the fund and there is no burden on the state.”
Will move SC: kerala fmKerala Finance Minister Thomas Isaac said on Tuesday that Kerala will move
Supreme Court along with the nine other states that have opposed the Centre’s twin borrowing options