13th instalment of Rs 6,000 crore released to States to meet GST compensation shortfall
New Delhi, January 26, 2021
The Department of Expenditure released the 13th weekly instalment of Rs 6,000 crore to the States on Monday 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 to the three Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir and Puducherry) who are members of the GST Council, an official press release said.
The remaining five States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation, it said.
Till now, 70% of the total estimated GST compensation shortfall has been released to the States and UTs with Legislative Assembly. Out of this, an amount of Rs 71,099.56 crore has been released to the States and Rs 6,900.44 crore to the three UTs with Legislative Assembly.
The Union Government 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 on behalf of the States and UTs. Starting from October 23, 2020, 13 rounds of borrowings have been completed so far.
The amount released this week has been borrowed at an interest rate of 5.3083%. So far, an amount of Rs. 78,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7491%.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government has also granted additional borrowing permission equivalent to 0.50 % 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 given their preference for Option-I. Permission for borrowing the entire additional amount of Rs. 1,06,830 crore (0.50 % of GSDP) has been granted to 28 States under this provision, the release added.