States get balance Rs 44,000 crore as GST compensation 

NEW DELHI:  The Centre on Thursday said it has released Rs 44,000 crore to states and union territories as compensation for revenue shortfall, thus paying them the entire Rs 1.59 lakh crore promised for this fiscal year.

“After taking into account earlier release of Rs 1,15,000 crore (Rs 75,000 crore released on 15th July, 2021 and Rs 40,000 crore released on 7th October, 2021), total amount released in the current financial year as back-to-back loan in-lieu of GST compensation is Rs 1,59,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection,” finance ministry said in a statement.

The centre added this frontloading of the fund transfer is meant to help states to carry out Covid management and  plan capital expenditure needed to support growth.

“It is expected that this release will help the states/Union territories in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects,” said the statement.

The finance ministry added this amount of Rs 1.59 lakh crore would be over and above the compensation in excess of Rs 1 lakh crore (based on cess collection) that is estimated to be released to states/UTs with legislature during this financial year.

The sum total of Rs 2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY22.