Govt releases 9th weekly installment of Rs 6000 cr to states to meet GST compensation shortfall
New Delhi: The Ministry of Finance on Monday released the 9th weekly instalment of six thousand crore rupees to the states to meet the GST compensation shortfall. Out of this, an amount of over five thousand five hundred 16 crore rupees has been released to 23 States and an amount of over 483 crore rupees has been released to the three Union Territories with Legislative Assembly, Delhi, Jammu and 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.
The Centre had set up a special borrowing window in October this year to meet the estimated shortfall of 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. The borrowings have been done in nine rounds. The amount borrowed so far was released to the states on 23rd October, 2nd November, 9th November, 23rd November, 1st December, 7th December, 14th December, 21st December and 28th December this year.
The amount released this week was the 9th instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 5.15 per cent. So far, an amount of 54 thousand crore rupees has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.76 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 one lakh six thousand eight hundred 30 lakh crore which is 0.50 per cent of GSDP has been granted to 28 states under this provision.
