Finance Ministry releases weekly instalment of ₹6,000 crore to states to meet GST shortfall

Till now, 86% of the total estimated GST compensation shortfall has been released to the states and Union Territories (U.T.s) with legislative assembly.

The Finance Ministry on Monday released the 16th instalment of ₹ 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far to ₹ 95,000 crore.

Till now, 86% of the total estimated GST compensation shortfall has been released to the states and Union Territories (U.T.s) with legislative assembly.

Out of this, an amount of ₹ 86,729.93 crore has been released to the states and ₹ 8,270.07 crore to the three U.T.s with legislative assembly (Delhi, Jammu and Kashmir, Puducherry).

The remaining five states — Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim — do not have a gap in revenue on account of GST implementation, it added.

The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of ₹1.10 lakh crore in revenue arising on account of implementation of GST.

The finance ministry in a statement said it has released the 16th weekly instalment of ₹ 6,000 crore to the states to meet the GST compensation shortfall. The amount has been borrowed this week at an interest rate of 4.64 %.

“So far, an amount of ₹95,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7831 %,” it added.

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 % of Gross States Domestic Product (GSDP) to the states to help them in mobilising additional financial resources.

Permission for borrowing the entire additional amount of ₹ 1,06,830 lakh crore (0.50 % of GSDP) has been granted to 28 states under this provision, the statement added.

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