Rajasthan has sought extension of the Goods and Services Tax (GST) compensation payable to the States by five more years, from June 2022 to June 2027, after its calculation on the basis of the total revenue deficit. The State has also called for extension of the additional borrowing limit till the next financial year in view of the economic situation arising out of the COVID-19 pandemic.
Chief Minister Ashok Gehlot has shot off a letter to PM Narendra Modi in this connection ahead of the presentation of the Union Budget on February 1. Mr. Gehlot said though the economic activities had resumed after the lockdown, they were “far from reaching the normal levels”.
Mr. Gehlot said Rajasthan had availed additional borrowing to the tune of 2% of the Gross State Domestic Product in the current financial year. A similar provision of 2% additional borrowing should be allowed in the next financial year as well to enable the State government to take care of the committed liabilities, he said.
The Chief Minister pointed out that the negative impact of the pandemic on the economy would cause continued stunted growth. As a result, the expected growth in GSDP would not be achieved and the revenue streams of the State would not reach the desired levels, he said.
