FM releases 7th weekly installment of Rs 6,000 crore to States to meet GST compensation shortfall
Finance ministry has released the seventh weekly installment of Rs 6,000 crore to the States 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 three Union Territories with Legislative Assembly Delhi, Jammu and Kashmir and Puducherry which 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.
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 have been done in seven rounds.
The amount released this week was the 7th installment of such funds provided to the States. So far, an amount of Rs 42,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7712 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 been given their preference for Option-I. Permission for borrowing the entire additional amount of Rs 1,06,830 crore (0.50 per cent of GSDP) has been granted to 28 States under this provision.