By TIOL News Service

NEW DELHI, FEB 03, 2021: THE Finance Ministry on Wednesday released the 14th weekly instalment of Rs. 6,000 crore to the States to meet the Goods and Services Tax (GST) compensation shortfall, taking the total funds disbursed to Rs. 84,000.

Till now, 76 per cent of the total estimated GST compensation shortfall has been released to the States and Union Territories (UTs) with Legislative Assembly.

The Centre 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 the GST.

"The borrowings are being done through this window by the government on behalf of the States and UTs. Fourteen rounds of borrowings have been completed so far starting from 23rd October, 2020," said the Finance Ministry.

It said, of the Rs. 6,000 crore released on Wednesday. Rs. 5,516.60 crore has been released to the 23 States and Rs. 483.40 crore to Delhi, Jammu and Kashmir, and Puducherry, the three qualified UTs.

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

The amount released this week was the 14th instalment that was borrowed at an interest rate of 4.6144 per cent.

"So far, an amount of Rs. 84,000 crore has been borrowed by the Central government through the special borrowing window at an average interest rate of 4.7395 per cent," the Finance Ministry noted.

In addition to providing funds through the special borrowing window to meet the GST shortfall, the government also granted additional borrowing permission equivalent to 0.50 per cent of the Gross States Domestic Product (GSDP), Rs. 1,06,830 crore, to the States to help them in mobilising additional financial resources.