FinMin releases weekly installment of Rs 6,000 cr to states to meet GST shortfall

By: |
February 3, 2021 5:51 PM

Out of this, an amount of Rs 76,616.16 crore has been released to 23 states and Rs 7,383.84 crore to the 3 UTs with Legislative Assembly (Delhi, J&K, Puducherry).

The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim, do not have a gap in revenue on account of GST implementation, it added.The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim, do not have a gap in revenue on account of GST implementation, it added.

The Finance Ministry on Wednesday released the 14th installment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount of fund released so far to Rs 84,000 crore.

Till now, 76 per cent of the total estimated GST compensation shortfall has been released to states and 3 UTs.
Out of this, an amount of Rs 76,616.16 crore has been released to 23 states and Rs 7,383.84 crore to the 3 UTs with Legislative Assembly (Delhi, J&K, Puducherry).

The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim, do not have a gap in revenue on account of GST implementation, it added.

The Centre 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 Finance Ministry in a statement said it has released the 14th weekly installment of Rs 6,000 crore to states to meet the GST compensation shortfall. The amount has been borrowed this week at an interest rate of 4.61 per cent.
“So far, an amount of Rs 84,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.74 per cent,” it added.

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 per cent of Gross State Domestic Product (GSDP) to states to help them mobilise additional financial resources.

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 statement added.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Run-up to polls: Private gencos want Tamil Nadu to clear dues
2ED probe into Kerala govt body causes a flutter: state FM Thomas Isaac
3Private power plants seek Odisha govt’s help to cut water charges