14th instalment of Rs. 6,000 crore released to the States to meet the GST compensation shortfall
New Delhi, Feb 3 (HS): The Ministry of Finance, Department of Expenditure has released the 14th weekly installment of Rs. 6,000 crore to the States today to meet the 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 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & 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 the officials, as of now 76 percent of the total estimated GST compensation shortfall has been released to the States & UTs with Legislative Assembly. Out of this, an amount of Rs. 76,616.16 crore has been released to the States and an amount of Rs. 7,383.84 crore has been released to the 3 UTs with Legislative Assembly.
The Government 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 borrowings are being done through this window by the Government of India on behalf of the States and UTs. 14 rounds of borrowings have been completed so far starting from 23rd October, 2020.
The officials further said that the amount released this week was the 14th installment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.6144 percent. So far, an amount of Rs. 84,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7395 percent.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 percent of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have given their preference for Option-I. Permission for borrowing the entire additional amount of Rs. 1,06,830 crore (0.50 percent of GSDP) has been granted to 28 States under this provision.
