FinMin releases weekly installment of ₹6,000 cr to States to meet GST shortfall

FinMin releases weekly installment of ₹6,000 cr to States to meet GST shortfall

February 3, 2021

Till now, 76% of the total estimated GST compensation shortfall has been released to States and three Union Terrirtories.

The Finance Ministry on Wednesday released the 14th installment of ₹6,000 crore to States to meet the GST compensation shortfall, taking the total amount of fund released so far to ₹84,000 crore.

Till now, 76% of the total estimated GST compensation shortfall has been released to States and three Union Terrirtories.

Out of this, an amount of ₹76,616.16 crore has been released to 23 States and ₹7,383.84 crore to the three Union Terrirtories with Legislative Assembly (Delhi, J&K, 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 14th weekly installment of ₹6,000 crore to States to meet the GST compensation shortfall. The amount has been borrowed this week at an interest rate of 4.61%.

"So far, an amount of ₹84,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.74%," 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 0.5% of Gross State Domestic Product (GSDP) to States to help them mobilise additional financial resources.

Permission for borrowing the entire additional amount of ₹1,06,830 crore (0.5% of GSDP) has been granted to 28 States under this provision, the statement added.

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