Centre releases 12th Instalment of Rs 6,000 cr to States to meet GST compensation shortfall

Till now, 65 per cent of the total estimated GST compensation shortfall has been released to the States and UTs with the Legislative Assembly.
Centre releases 12th Instalment of Rs 6,000 cr to States to meet GST compensation shortfall
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NEW DELHI:

The Centre on Monday released the twelfth weekly installment of Rs 6,000 crore to the States and Union Territories 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 three Union Territories (UT) with Legislative Assembly (Delhi, Jammu and Kashmir and Puducherry) who are members of the GST Council, informed the Department of Expenditure, Ministry of Finance.

The remaining five States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

Till now, 65 per cent of the total estimated GST compensation shortfall has been released to the States and UTs with the Legislative Assembly. Out of this, an amount of Rs 65,582.96 crore has been released to the States and an amount of Rs 6,417.04 crore has been released to the three UTs with the Legislative Assembly.

The Government of India had set up a special borrowing window in October, 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. Twelve rounds of borrowings have been completed so far starting from 23rd of October.

The amount released this week was the 12th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.4315 per cent.

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So far, an amount of Rs.72,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7024 per cent.

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 0.50 per cent of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

All the States have given their preference for Option-I. Permission for borrowing the entire additional amount of Rs.1,06,830 crore (0.50 per cent of GSDP) has been granted to 28 States under this provision.

State wise additional borrowing of 0.50 percent of GSDP allowed & amount of funds raised through special window passed on to the States/UTs till 18.01.2021 (Northeastern States):

1. Arunachal Pradesh: Additional borrowing of 0.50 percent of GSDP allowed was Rs 143 crore with no amount of fund raised through special window since Arunachal has no GST compensation gap.

2. Assam: Additional borrowing of 0.50 percent of GSDP allowed was Rs 1869 crore and the amount of fund raised through special window is Rs 724.96 crore.

3. Manipur: Additional borrowing of 0.50 percent of GSDP allowed was Rs 151 crore with no amount of fund raised through special window since Manipur has no GST compensation gap.

4. Mizoram: Additional borrowing of 0.50 percent of GSDP allowed was Rs 132 crore with no amount of fund raised through special window since Mizoram has no GST compensation gap.

5. Meghalaya: Additional borrowing of 0.50 percent of GSDP allowed was Rs 194 crore and the amount of fund raised through special window is Rs 81.59 crore.

6. Nagaland: Additional borrowing of 0.50 percent of GSDP allowed was Rs 157 crore with no amount of fund raised through special window since Nagaland has no GST compensation gap.

7. Sikkim: Additional borrowing of 0.50 percent of GSDP allowed was Rs 156 crore with no amount of fund raised through special window since Sikkim has no GST compensation gap.

8. Tripura: Additional borrowing of 0.50 percent of GSDP allowed was Rs 297 crore and the amount of fund raised through special window is Rs 165.00 crore.

(PIB)

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