NEW DELHI – The Indian government on Thursday suggested states borrow up to 2.35 trillion rupees ($31.8 billion) from the market to meet a tax shortfall, Finance Minister Nirmala Sitharaman said.
The government could also support the states to raise up to 970 billion rupees in loans from the Reserve Bank of India at a lower rate to meet the states’ tax shortfall, estimated at three trillion rupees in the current fiscal year, beginning April.
“The states have sought seven days’ time to consider the proposal,” Sitharaman told reporters after a virtual meeting with state finance ministers.
She added that loan amount could be repaid from the surcharge on taxes imposed on luxury and sin items like cars and tobacco products, under the Goods and Services Tax in coming years.
August 27, 2020
Reporting by Manoj Kumar and Aftab Ahmed; Editing by Toby ChopraOur Standards:The Thomson Reuters Trust Principles.