The Union Finance Ministry on Friday said it had issued its 13th weekly installment of Rs 6,000 crore to 23 states and three Union Territories (UTs) to meet the GST compensation shortfall.
Of this amount, a total of Rs 5,516.60 crore was disbursed to 23 states, and a total of Rs 483.40 crore was disbursed to 3 Union Territories (UT) with the Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) being members. from the GST Council.
The remaining five states of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim have no gaps in revenue due to the implementation of GST, the Finance Ministry said in a statement.
To date, 70 per cent of the total estimated Goods and Services Tax (GST) compensation shortfall has been disbursed to states and UTs that have Legislative Assemblies. Of this amount, a total of Rs 71,099.56 crore was disbursed to the states and a total of Rs 6,900.44 crore was disbursed to 3 UTs with the Legislative Assembly, the ministry said.
The government has provided a special borrowing window in October 2020 to cover the estimated shortfall of Rs 1.10 lakh crore in revenue arising from the implementation of GST. Loans are being made through this window by the Government of India on behalf of the State and UT. 13 lending rounds have been completed so far starting from 23 October 2020.
“The amount released this week is the 13th installment of such funds made available to the states. The amount has been borrowed this week at an interest rate of 5.3083 per cent. So far, a total of Rs 78,000 crore has been borrowed by the Central Government through a special lending window at the rate the average interest is 4.7491 per cent, ”the Finance Ministry said.
In addition to providing funds through a special lending window to cover the shortfall in revenue due to the implementation of GST, the Government of India has also granted additional borrowing permission equivalent to 0.50 per cent of Gross Domestic Product (GSDP) to states opting for Option -I to meet the GST compensation shortfall to assist them in mobilize additional financial resources.
All states have given their preference to Option-I. Permission to borrow a total additional amount of Rs 1,06,830 crore (0.50 per cent of GSDP) has been granted to 28 states under this provision.