FinMin releases Rs 6,000 cr to states to meet GST compensation shortfall
The Finance Ministry on Monday released the tenth instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall, taking the total amount provided so far under this window to Rs 60,000 crore.
The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST.
The Ministry of Finance in a statement said it has released the tenth weekly instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall.
Out of this, Rs 5,516.60 crore has been released to 23 states and Rs 483.40 crore has been given to the three Union Territories (UTs) with Legislative Assembly (Delhi, Jammu & Kashmir and Puducherry), who 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, it said.
"The amount has been borrowed this week at an interest rate of 4.15 percent. So far, an amount of Rs 60,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.68 percent," the statement said.
The borrowings under the special window have been done in 10 rounds and the amount borrowed so far was released to the states on October 23, November 2, November 9, November 23, December 1, December 7, December 14, December 21, December 28, 2020, and January 4, 2021.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Centre has also granted additional borrowing permission equivalent to 0.50 percent of gross state domestic product (GSDP) to the states to help them in mobilising more financial resources.
Permission for borrowing the entire additional amount of Rs 1,06,830 lakh crore (0.50 per cent of GSDP) has been granted to 28 states under this provision, the statement added.