INR 6K cr. released to states to meet GST compensation shortfall
New Delhi, Dec. 9 (IANS): The Ministry of Finance has released the weekly instalment of INR 6,000 crore to the states to meet the GST compensation shortfall.
Out of this, an amount of INR 5,516.60 crore has been released to 23 states and an amount of INR 483.40 crore has been released to the three Union Territories (UT) with Legislative Assembly — Delhi, Jammu & Kashmir and Puducherry — who are members of the GST Council, said a Finance Ministry statement.
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 is borrowing this amount on behalf of the states and UTs through a special borrowing window to meet the estimated shortfall of INR 1.10 lakh crore in revenue arising on account of GST implementation.
The amount released this week was the sixth instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 4.2089 per cent. So far, an amount of INR 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.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the 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 INR 1,06,830 crore has been granted to 28 states under this provision.