The Ministry of Finance on Monday said it has released the tenth weekly instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to three union territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir and Puducherry) who are members of the GST Council.
The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation, the ministry said.
With this, the central government has released a total of Rs 60,000 crore so far to all States and UTs, which amounts to more than 50 per cent of their estimated GST compensation shortfall.
"The amount released this week was the 10th instalment of such funds provided to the States. 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," the Finance Ministry said.
In the wake of economic disruption-led by coronavirus pandemic, 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.
So far, the borrowings have been done in 10 rounds and the same have been released to the states on October 23, November 2, November 9 , November 23 , December 1, December 7, December 14, December 21 and December 28 last year, and January 4, 2021.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the central government has also granted additional borrowing permission equivalent to 0.50 per cent of Gross State 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.