Economic News

Government suggests to states to borrow 2.35 trillion rupees to meet tax shortfall

India’s Finance Minister Nirmala Sitharaman attends a joint news conference with U.S. Treasury Secretary Steven Mnuchin in New Delhi, India, November 1, 2019. REUTERS/Adnan Abidi/File Photo

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.

Reuters

August 27, 2020

Reporting by Manoj Kumar and Aftab Ahmed; Editing by Toby ChopraOur Standards:The Thomson Reuters Trust Principles.

https://in.reuters.com/article/india-economy-tax/government-suggests-to-states-to-borrow-2-35-trillion-rupees-to-meet-tax-shortfall-idINKBN25N1O4

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