: 12th instalment of Rs 6,000 crore released to states to meet GST compensation shortfall #FinanceIndia #StockMarketNEWS 12th instalment of Rs 6,000 crore released to states to meet GST compensation

@StockMarketNEWS Wed 20 Jan, 2021

Posted in: #FinanceIndia #StockMarketNEWS

12th instalment of Rs 6,000 crore released to states to meet GST compensation shortfall #FinanceIndia #StockMarketNEWS
12th instalment of Rs 6,000 crore released to states to meet GST compensation shortfall New Delhi, Jan 19 (KNN) The government has released the 12th weekly instalment of Rs 6,000 crore to the states to meet the Goods and Services Tax (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 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the 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, the Finance Ministry said in a statement on Monday.

Till now, 65 per cent of the total estimated GST compensation shortfall has been released to the states & UT with the Legislative Assembly. Out of this, an amount of Rs 65,582.96 crore has been released to the states and an amount of Rs 6,417.04 crore has been released to the 3 UTs with the Legislative Assembly.

The Government of India 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 of India on behalf of the States and UTs. 12 rounds of borrowings have been completed so far starting from 23rd October, 2020.

The amount released this week was the 12th instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 4.4315 per cent. So far, an amount of Rs 72,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.7024 per cent.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India 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. 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 amount of additional borrowing permission granted to 28 States and the amount of funds raised through a special window and released to the States and Union Territories so far is annexed.