Centre releases 18th instalment of Rs 4,000Cr to States to meet GST shortfall
By TIOL News Service
NEW DELHI, MAR 01, 2021: THE Finance Ministry on Monday said it released the 18th weekly instalment of Rs. 4,000 crore to the States to meet the shortfall arising from the implementation of the Goods and Services Tax (GST), taking the total funds disbursed so far to Rs. 1.04 lakh crore.
The Department of Expenditure on February 26 released an amount of Rs. 3,677.74 crore to 23 States and Rs. 322.26 crore to the three Union Territories (UTs) of Delhi, Jammu and Kashmir, and Puducherry.
“ The remaining five States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation ,” said the ministry.
The amount released this week has been borrowed at an interest rate of 4.7924 per cent.
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.
Starting October 23, 2020, 18 rounds of borrowings have been completed so far. “ Till now, 94 percent of the total estimated GST compensation shortfall has been released to the States and Union Territories (UTs),” it added.
So far, an amount of Rs. 1,04,000 crore has been borrowed by the Central government through the special borrowing window at an weighted average interest rate of 4.8236 per cent. Out of this, an amount of Rs. 95,138.08 crore has been released to the States and an amount of Rs. 8,861.92 crore has been released to the three UTs.
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.