Eighth Instalment of Rs 6,000 crore released by the Centre

New Delhi: The Ministry of Finance on Monday had released the eight weekly instalments of Rs 6,000 crore to the states to meet the Goods and Services Tax (GST) compensation shortfall which was caused by the COVID-19 pandemic.

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 three union territories (Delhi, Jammu & Kashmir, and Puducherry) who are the members of the GST Council.

A total amount of Rs 48,000 crore has been released so far to all the states and Union Territories.

However, the remaining five states- Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

A special borrowing window was set up in October by the Central government to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings have been done in seven rounds so far through this window by the Centre on behalf of the states and Union Territories.

So far, the amount borrowed was released to the states on October 23, November 2, November 9, November 23, December 1, December 7, December 14 and December 21.

The eighth instalments of the fund were released this week which was borrowed at an interest rate of Rs 4.1902 per cent. An amount of Rs 48,000 crore has also been borrowed by the Central government through the special borrowing window at an average interest rate of 4.698 per cent.

In addition to this, funds provided through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Centre has also granted additional borrowing permission which is equivalent to 0.05 per cent of Gross States Domestic Product (GSSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The amount of additional borrowing permission granted to 28 states and the number of funds raised through the special window and released to the states and union territories so far is annexed.

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