<p>Karnataka had to suffer the highest burden among all Indian states after the Centre offered to raise loans to provide for the shortfalls in GST compensation, Union Budget documents show.</p>.<p>In the two pandemic-hit fiscals, the Centre provided Rs 30,515.91 crore as loans to Karnataka, which was 11% of all GST compensation loans provided to states and union territories. The second worst-hit was Maharashtra in terms of loans raised to offset GST compensation.</p>.<p>The loans, it can be recalled, were provided to state governments in 2020-21 and 2021-22 fiscals due to the severe shortfall in GST revenue faced by the Centre following the Covid-19 pandemic. Unable to pay GST compensation, the Centre had asked states to opt for a special borrowing window to avail loans and fund various expenses in 2020.</p>.<p>As a result, four ‘back-to-back’ loans were released to Karnataka - one loan amounting to Rs 15,489.32 crore, two loans worth Rs 6,203.5 crore each and another worth Rs 2,619.59 crore - all totaling to Rs 30,515.91 crore.</p>.<p>Loans raised to all the states using the mechanism was Rs 2.69 lakh crore. After Karnataka, the highest loan burden was for Maharashtra at Rs 25,759 crore followed by Prime Minister Narendra Modi’s home state of Gujarat at Rs 22,262.21 crore.</p>.<p>Though not many states were keen on raising loans to fulfill the budgetary commitments made by the Centre, prevailing financial conditions forced them to agree. The Centre, during the crisis, had offered two borrowing options - one involved states borrowing from the market, which was withdrawn by the Centre owing to opposition.</p>.<p><strong>Watch latest videos by DH here:</strong></p>
<p>Karnataka had to suffer the highest burden among all Indian states after the Centre offered to raise loans to provide for the shortfalls in GST compensation, Union Budget documents show.</p>.<p>In the two pandemic-hit fiscals, the Centre provided Rs 30,515.91 crore as loans to Karnataka, which was 11% of all GST compensation loans provided to states and union territories. The second worst-hit was Maharashtra in terms of loans raised to offset GST compensation.</p>.<p>The loans, it can be recalled, were provided to state governments in 2020-21 and 2021-22 fiscals due to the severe shortfall in GST revenue faced by the Centre following the Covid-19 pandemic. Unable to pay GST compensation, the Centre had asked states to opt for a special borrowing window to avail loans and fund various expenses in 2020.</p>.<p>As a result, four ‘back-to-back’ loans were released to Karnataka - one loan amounting to Rs 15,489.32 crore, two loans worth Rs 6,203.5 crore each and another worth Rs 2,619.59 crore - all totaling to Rs 30,515.91 crore.</p>.<p>Loans raised to all the states using the mechanism was Rs 2.69 lakh crore. After Karnataka, the highest loan burden was for Maharashtra at Rs 25,759 crore followed by Prime Minister Narendra Modi’s home state of Gujarat at Rs 22,262.21 crore.</p>.<p>Though not many states were keen on raising loans to fulfill the budgetary commitments made by the Centre, prevailing financial conditions forced them to agree. The Centre, during the crisis, had offered two borrowing options - one involved states borrowing from the market, which was withdrawn by the Centre owing to opposition.</p>.<p><strong>Watch latest videos by DH here:</strong></p>
