Govt releases entire Rs 1.10 lakh crore GST shortfall to states

New Delhi, Mar 16 (KNN) The Finance Ministry has released the full Rs 1.10 lakh crore estimated GST compensation shortfall to the states with the release of final weekly installment of Rs 4,104 crore.

''The final weekly instalment of Rs 4,104 crore to the states to meet the GST compensation shortfall. Out of this, an amount of Rs 4,086.97 crore has been released to 23 States and an amount of Rs 17.03 crore has been released to the 3 UTs with the Legislative Assembly.

With the current release, 100 percent of the total estimated GST compensation shortfall of Rs 1.10 lakh crore for the year 2020-21 has now been released to the states & UTs with the Legislative Assembly. Out of this, an amount of Rs 101,329 crore has been released to the states and an amount of Rs 8,879 crore has been released to the 3 UTs with the Legislative Assembly,'' the ministry said in a statement on Monday.

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. The borrowings are being done through this window by the government on behalf of the states and UTs. Starting from 23rd October, 2020, the borrowings were completed in 20 weekly instalments.

Under the special window, the government has been borrowing in government stock with tenure of 3 years and 5 years.

The borrowings made under each tenure are equally divided among all the states as per their GST compensation shortfall. With the current release, the proportionate pending GST shortfall with respect to borrowing under both 5 years tenure and 3 year tenure has been concluded for 23 states and 3 UTs with legislature. The remaining 5 states don't have any GST compensation shortfall, the ministry added.

The total amount of Rs 1,10,208 crore has been borrowed by the Central Government through the special borrowing window at an weighted average interest rate of 4.8473 per cent.