The Finance Ministry has released the 10th weekly instalment of ₹6,000 crore GST compensation shortfall to States. Out of this, ₹5,516.60 crore has been released to 23 States and ₹483.40 crore to Delhi, Jammu & Kashmir and Puducherry), the Union Territories with Legislative Assemblies, who are members of the GST Council.
The remaining five States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation. Now, more than 50 percent of the estimated GST compensation shortfall has been released, an official release said.
The central government had set up a special borrowing window in October 2020 to meet the estimated shortfall of ₹1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the central government on behalf of the States and UTs.
The amount has been borrowed this week at an interest rate of 4.1526 per cent. So far, ₹60,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.6892 per cent.
The centre has also granted additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product to the States choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. Permission for borrowing the entire additional amount of ₹ 1,06,830 crore has been granted to 28 States under this provision, the release added.