8th installment of Rs 6,000 cr released to states to meet GST compensation shortfall
Dec 21, 2020
New Delhi [India], December 21 : The Ministry of Finance has released eighth weekly installment of Rs 6,000 crore to states to meet the Goods and Services Tax (GST) compensation shortfall.
Of this, Rs 5,516.6 crore has been released to 23 states and an amount of Rs 483.4 crore has been released to the three union territories with legislative assembly (Delhi, Jammu & Kashmir and Puducherry) which are members of the GST Council.
The remaining five states -- Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim -- do not have a gap in revenue on account of GST implementation, according to an official statement released on Monday.
The government had set up a special borrowing window in October to meet the estimated shortfall of Rs 1.1 lakh crore in revenue arising on account of implementation of GST.
The borrowings have been done in seven rounds. The amount has been borrowed this week at an interest rate of 4.1902 per cent. So far, an amount of Rs 48,000 crore has been borrowed by the Central government through the special borrowing window at an average interest rate of 4.6986 per cent.
In addition to providing funds through special borrowing window to meet the shortfall in revenue on account of GST implementation, the government has also granted additional borrowing permission equivalent to 0.5 per cent of gross state domestic product (GSDP) to the states choosing option one.
All the states have been given their preference for option one. Permission for borrowing the entire additional amount of Rs 1.06 lakh crore (0.5 per cent of GSDP) has been granted to 28 states under this provision.
