Finance Ministry releases 14th weekly instalment of six thousand crore rupees to states to meet GST compensation shortfall
Union Finance Ministry has released the 14th weekly instalment of Rs 6,000 crore to the states today to meet the GST compensation shortfall.
Union Finance Ministry has released the 14th weekly instalment of Rs 6,000 crore to the states today to meet the GST compensation shortfall. Out of this, an amount of over Rs 5,516 crore has been released to 23 States and an amount of over Rs 483 crore has been released to the three Union Territories with Legislative Assembly 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.
Till now, 76 per cent of the total estimated GST compensation shortfall has been released to the States and UTs with the Legislative Assembly. Out of this, an amount of over Rs 76,616 crore has been released to the States and an amount of over Rs 7,383 crore has been released to the three UTs with the Legislative Assembly.
The Government of India had set up a special borrowing window in October last year to meet the estimated shortfall of Rs 1.10 lakh crore rupees 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. Fourteen rounds of borrowings have been completed so far starting from October 23, 2020.
The amount released this week was the 14th instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 4.61 per cent. 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 4.74 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 of India has also granted additional borrowing permission equivalent to 0.50 per cent 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 which is 0.50 per cent of GSDP has been granted to 28 states under this provision.