New Delhi (NVI): In a bid to bridge the Goods and Services Tax (GST) revenue shortfall, the Finance Ministry has released the 20th weekly instalment of Rs 4,104 crore to the States to meet the GST compensation shortfall, under a special borrowing window today.
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, according to a statement released by the Ministry of Finance.
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 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 Legislative Assembly, the statement added.
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 were being done through this window by the Centre on behalf of the states and UTs.
Under the special window, the Centre 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 the legislature.
The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation, the statement added.
The amount has been borrowed this week at an interest rate of 4.9288 percent. The total amount of Rs 1,10,208 crore has been borrowed by the Central Government through the special borrowing window at a weighted average interest rate of 4.8473 percent.
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 percent 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.