HIGHLIGHTS:

  • The 13th instalment to meet GST shortfall of Rs 6,000 crore has been released.
  • Till now a total amount of Rs. 78,000 crore has been released to states and UTs.
  • Rs 5,516.60 crore has been released to 23 states.
  • Rs 484.40 crore has been released to the three Union Territories with Legislative Assemblies (Delhi, J&K, and Puducherry) who are a member of the GST Council.

Ministry of Finance, Department of Commerce has released the 13th weekly instalment of Rs 6000 crore to the states to meet GST shortfall. Rs 5,516.60 crore has been released to 23 states while another Rs 484.40 crore has been released to the three Union Territories with Legislative Assemblies (Delhi, J&K, and Puducherry) who are a member of GST Council.

The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim do not have a gap in revenue on account of GST implementation. As of now the States and UTs with Legislative Assemblies have got 70% of the total estimated GST compensation shortfall. Out of this, an amount of Rs. 71,099.56 crore has been released to the States and an amount of Rs. 6,900.44 crore has been released to the 3 UTs with the Legislative Assembly.

A special borrowing window has been set up by the Government of India in October 2020 to meet Rs. 1.10 lakh crore estimated shortfall in revenue arising on account of implementation of the GST. The GOI is borrowing through this window on behalf of States and UTs. Starting from October 23, till now 13 rounds of borrowings have been completed.

The amount released this week was the 13th installment of such funds provided to the States. This week the amount has been borrowed having an interest rate of 5.3083%. Till now through this window, the Central Government has borrowed nearly Rs. 78,000 crore at an average interest rate of 4.7491%.

Apart from providing funds through a special borrowing window, the GOI has also granted extra borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilizing additional financial resources. All the states gave the green signal for option 1. Under the provision, permission has been granted to all the States to borrow the whole amount of Rs. 1,06,830 crore (0.50 % of GSDP).

The amount of additional borrowing permission granted to 28 States and the number of funds raised through the special window and released to the States and Union Territories so far is annexed. State-wise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 18.01.2021.

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