Meghalaya has so far borrowed Rs 1050 crore from the open market in the current fiscal year of April to October.
This is as per the report by Credit Analysis & Research Limited (CARE) Ratings published on October 14.
Recently, the Centre has allowed Meghalaya to mobilise Rs 194 crore through open market borrowings to meet the shortfall arising out of GST implementation.
The additional borrowing will be based on the weighted average cost of borrowing in October 2020 which is 6.73 per cent.
The Covid-19 induced lockdown and associated restrictions of the last seven months have resulted in a sharp fall in the Centre’s GST collections which has led to shortfalls in the compensation payable to states. This has aggravated the financial stress of the states all of which are already confronting sharp declines in revenues from own sources along with higher expenditure requirements for controlling and mitigating the impact of the pandemic.
It may be mentioned that the Department of Expenditure of the Finance Ministry on October 13 has granted permission to 20 states including Meghalaya to raise an additional amount of Rs 68,825 crore through open market borrowings in the current financial year.
The additional borrowing permission has been granted at 0.50 per cent of the Gross State Domestic Product (GSDP) to those States who have opted for Option- 1.
Meghalaya is among 20 states that have given their preferences for Option-1. The other states are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand. Eight states are yet to exercise an option.
States that choose Option-1 are given the facility of a special borrowing window, coordinated by the Ministry of Finance to borrow the amount of shortfall in revenue through issue of debt. The total shortfall in the revenue of the States on this account has been estimated at around Rs 1.1 lakh crore.
They are also allowed to borrow the final installment of 0.5 per cent of GSDP out of the 2 per cent additional borrowings permitted by the Government of India in view of the Covid-19 pandemic, waiving the reforms condition.
States that have exercised Option-1, to meet the shortfall arising out of GST implementation, the condition of carrying out the reforms to avail the final installment of 0.5 per cent of GSDP has been waived. Thus, the 20 states that have exercised Option-1, have become eligible to raise an amount of Rs 68,825 crore through open market borrowings.
Out of the total Rs 68,825 crore, Andhra Pradesh has been allowed to borrow Rs 5,051 crore, Arunachal Pradesh Rs 143 crore, Assam Rs 1,869 crore, Bihar Rs 3,231 crore, Goa Rs 446 crore, Gujarat Rs 8,704 crore, Haryana Rs 4,293 crore, Himachal Pradesh Rs 877 crore, Karnataka Rs 9,018 crore, Madhya Pradesh Rs 4,746 crore, Maharashtra Rs 15,394 crore, Manipur Rs 151 crore, Meghalaya Rs 194 crore, Mizoram Rs 132 crore, Nagaland Rs 157 crore, Odisha Rs 2,858 crore, Sikkim Rs 156 crore, Tripura Rs 297 crore, Uttar Pradesh Rs 9,703 crore, and Uttarakhand Rs 1,405 crore.