Mumbai: The Shiv Sena-led Maha Vikas Aghadi Government has chosen not to join the naysayers, studied non-BJP ruled states, to contradict the two alternatives offered by the Centre for GST relief. This can be in spite of its having major issues with the BJP-led government at the Centre for the latter’s non-payment of adequate help to handle the Covid-19 emergency and shifting key ventures to Gujarat.

A senior MVA Minister told said that The State Government has chosen to accept Option 1, wherein the entire principal and interest will be paid out of the compensation cess on cars, soft drinks, pan masala, tobacco, and coal, which can be amplified beyond the current date of June 2022. States that opt this will get loans at a specially arranged rate and the debt will not be included in their balance sheet, giving them room to borrow in the coming years. He educated that the state government will send a formal letter to the Centre on Tuesday, passing on its decision to zero in on Option 1.

Under this choice, the states might borrow Rs 97,000 crore from a special window encouraged by the government, the minister said. The burden of interest and reimbursement would be borne out of cess collection and the borrowing from the special window would not be treated as an obligation of the state.

‘‘There is likely to be a GST shortfall of Rs 40,000 crore in 2020-21. Under Option 1, the state government can get Rs 16,000 crore, while it will have to borrow another Rs 30,000 crore from different sources. The state government has taken a non-partisan approach, based on technical and professional considerations,’’ he noted.

According to the minister, the Centre ought to pay a part of the Rs 30,000 crore from the GST Compensation Cess. At a recently GST Council Meeting, Maharashtra Deputy Chief Minister Ajit Pawar, who holds the finance and planning division had recommended that the Centre raise obligation at low rates and clear all dues to states on a priority basis. As far as Maharashtra is concerned, Pawar had encouraged the Centre to clear overdue debts worth Rs 22,534 crore as of July. He had cautioned that further delays would cause the dues to take off to a record Rs 1 lakh crore in two years.