The central government on Wednesday said it has transferred the sixth installment of Rs 6,000 crore to the states to meet the GST compensation shortfall, releasing a total amount of Rs 36,000 crore so far. Of this, an amount of Rs 5,516.60 crore has been released to 23 states and Rs 483.40 crore to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & 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 Government of India is borrowing this amount on behalf of the states and UTs through a special borrowing window to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of GST implementation," Ministry of Finance said.
The amount released this week was borrowed at an interest rate of 4.2089 per cent, the Finance Ministry said. So far, an amount of Rs 36,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.7106 per cent, it added.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, Centre has also granted additional borrowing permission equivalent to 0.5 per cent of states' GSDP to the states choosing option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. So far, permission for borrowing an additional amount of Rs 1,06,830 crore has been granted to 28 states under this provision, the ministry said.
On October 15, the central government had announced that it will borrow Rs 1.1 lakh crore under the special window to meet the shortfall of GST compensation. It has evolved a special borrowing window to address the shortfall in the GST collection during the year 2020-2021.
By Chitranjan Kumar