Speed Post News Network
New Delhi : The Ministry of Finance has released the 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 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.
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, according to a PIB release.