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Business News/ News / India/  Govt releases additional 6k cr to states to meet GST compensation shortfall

Govt releases additional ₹6k cr to states to meet GST compensation shortfall

This is the eighth weekly instalment given to states under the special borrowing window setup by the government to meet the estimated shortfall of ₹1.10 lakh

Photo: Mint Premium
Photo: Mint

The Ministry of Finance has released 6,000 crore to states in order to meet the Good and Services Tax (GST) compensation shortfall. This is the eighth weekly instalment given to states under the special borrowing window setup by the government to meet the estimated shortfall of 1.10 lakh.

Out of the 6,000 crore, 5,516.60 crore has been released to 23 states and Rs. 483.40 crore has bene given to three Union Territories (UT) with the 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 revenue gap in terms of GST implementation. The special borrowing window, setup in October 2020, is for the states with a shortfall in revenue due as a result GST implementation.

These borrowings to states are given by the government of India on behalf of states and UTs and the amount borrowed this week is at an interest rate of 4.1902%. So far, the central government has borrowed 48,000 crore through the window at an average interest rate of 4.6986%.

Additionally, the government has also given an additional borrowing permission of up to 0.50% of Gross States Domestic Product (GSDP) to states. All the 28 states have chosen to borrow the entire additional amount of Rs. 1,06,830 crore which equals 0.50 % of GSDP.

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.

Out of the states, Maharashtra has raised 6124.17 crore through the special window and is allowed 15394 crore under additional borrowing at 0.50% and Punjab has raised 1841.04 crore with an additional borrowing of 3033 crore allowed.

Tamil Nadu has borrowed 3191.24 crore and is allowed 9627 crore additionally. The Uttar Pradesh government has been given 3071.33 crore under the special window and is allowed an additional borrowing of 973 crore. West Bengal, with an amount of 975.91 crore under the special window, is allowed borrowed 6787 crore at 0.50%.

The amount borrowed so far was released to states on 23rd October, 2020, 2nd November, 2020, 9th November, 2020, 23rd November, 2020, 1st December, 2020, 7th December, 2020, 14th December, 2020 and 21st December, 2020.

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Published: 21 Dec 2020, 04:13 PM IST
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