Centre releases Rs.6,000 cr to states as loan to meet GST shortfall

New Delhi, Dec 10 (KNN) Centre has released 6th instalment of Rs.6,000 crore to the States as back to back loan to meet the GST compensation shortfall.

The Ministry of Finance has released the weekly instalment of Rs. 6,000 crore to the states to meet the GST compensation shortfall, according to a statement released by the ministry.

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 the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & 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, it added.

The Government of India is borrowing this amount on behalf of the States and UTs through a special borrowing window to meet the estimated shortfall of Rs.1.10 lakh crore in revenue arising on account of GST implementation.

The amount released this week was the 6th instalment of such funds provided to the States.  The amount has been borrowed this week at an interest rate of 4.2089 %.  So far, an amount of Rs. 36,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7106%.

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 0.5% 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 Rs. 1,06,830 crore has been granted to 28 States under this provision.

The amount of additional borrowing permission granted to 28 States and the amount of funds raised through special window and released to the States and Union Territories so far is annexed.