The Union Finance Ministry has released the 8th 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 a total of 23 states and an amount of Rs. 483.40 crore has been released to the 3 Union Territories (UTs) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry), who are members of the GST Council.
The remaining 5 states, including Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim, do not have a gap in revenue on account of GST implementation, the Finance Ministry said in a statement.
The Indian 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 Indian government on behalf of the states and UTs.
The borrowings have been done in 7 rounds.
The amount borrowed so far was released to the states on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020, December 1, 2020, December 7, 2020, December 14, 2020 and December 21, 2020.
The amount released this week was the 8th instalment of such funds provided to the states.
The amount has been borrowed this week at an interest rate of 4.1902%.
So far, an amount of Rs. 48,000 crore has been borrowed by the Central government through the special borrowing window at an average interest rate of 4.6986%, the statement said.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Centre has also granted additional 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 mobilising additional financial resources.
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 % of GSDP) has been granted to 28 States under this provision.
The amount of additional borrowing permission granted to 28 States and the amount of funds raised through special window and released to the States and Union Territories so far is annexed, the Finance Ministry further said.