The Centre on Tuesday said that it has allowed 20 states to raise Rs 68,825 crore via open market borrowings in order to meet the GST revenue shortfall, PTI reported.

The announcement comes a day after the third meeting of the GST Council ended without reaching a consensus over the Centre’s proposal of states borrowing against future GST collections to make up for the shortfall.

The projected total compensation shortfall in the current fiscal stands at Rs 2.35 lakh crore.

An official statement, as quoted by PTI, stated on Tuesday that the Department of Expenditure, Ministry of Finance, has permitted 20 states to raise the amount.

“Additional borrowing permission has been granted at the rate of 0.50% of the Gross State Domestic Product (GSDP) to those states who have opted for Option 1, out of the two options suggested by the Ministry of Finance to meet the shortfall arising out of GST implementation,” it said.

The Centre, in August, had given two options to the states — to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 lakh crore from the market. It had also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing.

“Twenty States have given their preferences for Option-1. These States are – Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand. Eight States are yet to exercise an option,” the statement added.