Rs. 48,000 crores were released to all the States & UTs to compensate for GST

New Delhi: The Finance Ministry has released the 8th weekly installment of Rs 6000 crore to the states to bridge the reduction in GST compensation. Of this, a total amount of Rs 5,516.60 crore has been released to 23 states and a number of Rs 483.40 crore has been released to the 3 Union Territories (Delhi, Jammu, and Kashmir, and Puducherry), which are members of the GST Council. In the remaining 5 states – Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim – there has been no reduction in revenue due to the implementation of GST.

The Government of India had arranged a special lending window in October 2020 to meet the projected shortfall of Rs 1.10 lakh crore in revenue due to the implementation of GST. The Government of India is borrowing through this window on behalf of the States and Union Territories. These borrowings are made in 8 stages. The amount borrowed so far was released to the states on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020, December 1, 2020, December 7, 2020, December 14, 2020, and December 21, 2020, respectively. Has gone.

The amount released this week was the 8th installment of such funds provided to the states. This week this amount has been borrowed at an interest rate of 4.1902 percent. The central government has so far borrowed a total of Rs 48,000 crore through a special lending window at an average interest rate of 4.6986 percent.

In addition to providing funds through a special lending window to meet the reduction in revenue due to the implementation of GST, the Government of India has provided additional options to states that opt ​​for option-1 to meet the reduction in GST compensation. In order to help in raising financial resources, additional borrowing of an amount equal to 0.50 percent of the state gross domestic product (GSDP) is also permitted. All states have given preference to option-1. Under this provision, 28 states have been permitted to borrow the entire additional amount of Rs 1,06,830 crore (0.50 percent of GSDP).

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