Another Rs 6,000 crore launched to states to fulfill GST compensation shortfall

Image Source : FILE PHOTO Another Rs 6,000 crore launched to states to fulfill GST compensation shortfall
The Union Finance Ministry has launched the tenth weekly instalment of Rs 6,000 crore to the states to fulfill the GST compensation shortfall.

Out of this, an quantity of Rs 5,516.60 crore has been launched to 23 states and an quantity of Rs 483.40 crore has been launched to the three Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who’re members of the GST Council.

The remaining 5 states — Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim — do not need a niche in income on account of GST implementation. Now, greater than 50 per cent of the estimated GST compensation shortfall has been launched to the states and UTs with a Legislative Assembly.

The authorities had arrange a particular borrowing window in October 2020 to fulfill the estimated shortfall of Rs 1.10 lakh crore in income arising on account of implementation of GST. The borrowings are being executed by means of this window by the Centre on behalf of the states and UTs.

The borrowings have been executed in 10 rounds. The quantity borrowed to this point was launched to the states in 10 rounds on – October 23, November 2, 9, 23, December 1, 7, 14, 21 and 28 and now on January 4.

The quantity has been borrowed this week at an rate of interest of 4.1526 per cent.

So far, an quantity of Rs 60,000 crore has been borrowed by the federal government by means of the particular borrowing window at a mean rate of interest of 4.6892 per cent.

In addition to offering funds by means of the particular borrowing window to fulfill the shortfall in income on account of GST implementation, the federal government has additionally granted extra borrowing permission equal to 0.50 per cent of Gross States Domestic Product (GSDP) to the states selecting Option 1 to fulfill GST compensation shortfall to assist them in mobilising extra monetary sources.

All the states have been given their desire for Option 1. Permission for borrowing your complete extra quantity of Rs 1,06,830 crore (0.50 per cent of GSDP) has been granted to twenty-eight states below this provision.
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