The Ministry of Finance has released the eighth weekly instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the three Union Territories (UTs) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council, an official release said.
The remaining five States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.
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, the release said.
The borrowings have been done in seven rounds. The amount borrowed so far was released to the states on 23 October 2020, 2 November 2020, 9 November 2020, 23 November 2020, 1 December 2020, 7 December 2020, 14 December 2020 and 21 December 2020.
The amount released this week was the eighth instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 4.1902 per cent. So far, an amount of Rs 48,000 crore has been borrowed by the Centre through the special borrowing window at an average interest rate of 4.6986 per cent, the release 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, it said.
All the states have been given their preference for Option-I. Permission for borrowing the entire additional amount of Rs 1,06,830 crore (0.50 per cent of GSDP) has been granted to 28 States under this provision, the release said.
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