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Govt releases 9th installment of 6K cr loan to states to meet GST shortfall

Govt releases 9th installment of  ₹6K cr loan to states to meet GST shortfall
Govt releases 9th installment of 6K cr loan to states to meet GST shortfall

  • From October, a total of Rs.54,000 crore has been released under this window so that 23 states and 3 UTs can meet their GST compensation shortfall.
  • The ministry also informed that this is in addition to additional borrowing permission of Rs.1,06,830 lakh crore granted to the states.

The finance ministry on Monday released the ninth installment of 6,000 crore to the states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs.54,000 crore.

The finance ministry press release said, 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 three Union Territories who are members of the GST Council.

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"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.

In a tweet, the ministry also informed that this is in addition to additional borrowing permission of Rs.1,06,830 lakh crore granted to the states.

The Finance Ministry had set up a special borrowing window in October this year to meet the estimated shortfall of Rs.1.10 lakh crore in GST revenue. Till now nine rounds of borrowings have been done through this window on behalf of the states and UTs.

The amount borrowed so far was released to the states once in October, thrice in November, and five times this month. This was the last installment released this year. So far, an amount of Rs.54,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7488%. Meanwhile, this week's rate of borrowing was 5.1508%.

Apart from this, the finance ministry has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product to the states choosing Option-I to 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 Rs.1,06,830 lakh crore (0.50 % of GSDP) 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.

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