Sixth installment of Rs 6,000 cr released to states/UTs as loan to meet GST compensation shortfall
Dec 09, 2020
New Delhi [India], December 9 : The Finance Ministry has released the weekly installment of Rs 6,000 crores to the states to meet the Goods and Services Tax (GST) compensation shortfall.
Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crores has been released to Delhi, Jammu and Kashmir, and Puducherry, who are members of the GST Council. The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim do not have a gap in revenue on account of GST implementation, according to a statement by the Ministry.
The central government is borrowing this amount on behalf of the states and UTs through a special borrowing window to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of GST implementation.
The amount released this week was the 6th installment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 4.2089 per cent. So far, an amount of Rs 36,000 crores has been borrowed by the Centre through the special borrowing window at an average interest rate of 4.7106 per cent.
In addition to providing funds through the 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 states' GSDP to the states choosing option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. "So far, permission for borrowing an additional amount of Rs. 1,06,830 crore has been granted to 28 States under this provision," it said.
