Centre releases 9th Installment of Rs6000 cr to states to meet GST shortfall
New Delhi: Union Finance Ministry has released the 9th installment of Rs 6,000 cr to the states to meet the GST compensation shortfall.
Of this, Rs.5,516.60 cr was released to 23 States and an amount of Rs 483.40 cr released to three Union Territories (UTs) with Legislative Assembly (Delhi, Jammu & Kashmir & 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 Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs1.10 lakh cr in revenue arising on account of implementation of GST.
The borrowings are being done through this window by the Union Government on behalf of the states and UTs.
The borrowings were done in nine rounds. The amount borrowed so far was released to the states on October 23, 2nd November, 9th November, 23rd November, 1st December, 7th December, 14th December, 21st December and 28th December.
The amount released this week was the 9th installment of such funds provided to the States. So far, an amount of Rs54,000 cr was borrowed by the Centre through the special borrowing window at an average interest rate of 4.7488%.
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 % of Gross States Domestic Product(GSDP)to the states choosing Option-Ito 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 Rs1,06,830 lakh cr (0.50 % of GSDP) has been granted to 28 States under this provision.