The Ministry of Finance has today released the tenth weekly installment of Rs 6,000 crore to the states to meet the GST compensation shortfall. Out of this, an amount of Rs 69.39 crore was released to Meghalaya.
The amount released this week was the tenth installment of such funds provided to the states.
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 (UT) with Legislative Assembly (Delhi, Jammu & 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.
Now, more than 50 per cent of the estimated GST compensation shortfall has been released to the states and UTs having legislative assemblies.
The Government of India 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. The borrowings have been done in ten rounds.
The amount borrowed so far was released to the states on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020, December 1, 2020, December 7, 2020, December 14, 2020, December 21, 2020, December 28, 2020 and January 4, 2021.
The amount has been borrowed this week at an interest rate of 4.1526 per cent. So far, an amount of Rs 60,000 crore has been borrowed by the Central government through the special borrowing window at an average interest rate of 4.6892 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.
