The central government on Monday released the ninth weekly instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall. Out of this, Rs 5,516.60 crore has been released to 23 states and Rs 483.40 crore to three union territories (Delhi, Jammu & Kashmir, and Puducherry) who are members of the GST Council. As many as five states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim, were not paid GST implementation as they do not have a gap in revenue due to GST rollout.
With the release of the 9th instalment, the Centre has issued a total GST compensation of Rs 54,000 crore to all states and UTs.
"The amount has been borrowed this week at an interest rate of 5.1508 per cent. So far, an amount of Rs 54,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.7488 per cent," Ministry of Finance notified on Monday.
In wake of the coronavirus pandemic-led economic disruption, the government of India had set up a special borrowing window in October this year 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 central government on behalf of the states and UTs.
So far, the borrowings have been done in nine rounds and the same amount have been released to the states as on 23 October, 2 November, 9 November, 23 November, 1 December, 7 December, 14 December, 21 December, and 28 December, 2020.
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 allowed additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product (GSDP) to the states choosing option 1 to meet GST compensation shortfall to help them in mobilising additional financial resources. All the states have been given their preference for Option 1. Under this provision, the government has granted permission to 28 states for borrowing the entire additional amount of Rs 1,06,830 lakh crore (0.50 per cent of GSDP).
By Chitranjan Kumar