News Brief

GST Compensation Shortfall Released To States, UTs Reaches Rs 1.06 Lakh Crore: Govt

Swarajya StaffMar 09, 2021, 01:04 PM | Updated 01:04 PM IST
Ministry of Finance. (GettyImages)

Ministry of Finance. (GettyImages)


The Finance Ministry has released the ninetheenth weekly instalment of Rs 2,104 crore to the states to meet the GST compensation shortfall.

Out of this, an amount of Rs 2,103.95 crore has been released to seven states and an amount of Rs 5 lakh has been released to the Union Territory of Puducherry.

Till now, 96 per cent of the total estimated GST compensation shortfall has been released to the states and UTs with Legislative Assembly. Out of this, an amount of Rs 97,242.03 crore has been released to the States and an amount of Rs 8,861.97 crore has been released to the three UTs with Legislative Assembly, the Finance Ministry said in a statement on Tuesday (9 March).

The government 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.

Nineteen rounds of borrowings have been completed so far starting from 23 October 2020, the statement said.


With the current release, the proportionate pending GST shortfall with respect to borrowing under five years tenor has been concluded for 23 States and three UTs with legislature. The remaining five states have no GST compensation shortfall.

The amount released this week was the nineteenth instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.8594 per cent.

So far, an amount of Rs 1,06,104 crore has been borrowed by the Central Government through the special borrowing window at an weighted average interest rate of 4.8842 per cent, the statement added.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the government has also granted additional borrowing permission equivalent to 0.50 per cent 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.

All the States have given their preference for Option-I. The permission for borrowing the entire additional amount of Rs1,06,830 crore (0.50 per cent of GSDP) has been granted to 28 States under this provision.

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