STATES
Centre releases entire Rs 1,10,000 crore of estimated GST compensation shortfall to the States
- IBJ Bureau
- Mar 16, 2021
The
Finance Ministry on Monday said it had released the entire Rs 1.10 lakh
crore estimated GST compensation shortfall to the States with the
release of final weekly instalment of Rs
4,104 crore.
With the release of the 20th instalment, 100 per cent of the total estimated GST compensation
shortfall of Rs 1.10 lakh crore for the year 2020-21 has now been
released to
the States and Union Territories (UTs) with Legislative Assembly. Out
of this, an amount of Rs 1,01,329 crore has been released to the States
and an amount of Rs 8,879 crore has been released to the three UTs with
Legislative Assembly, the ministry said in
a statement.
The
Union government had set up a special borrowing window in October last
year to meet the estimated shortfall of Rs 1.10 lakh crore in revenue
arising on account of implementation of
GST. The borrowings are being done through this window by the Central
government on behalf of the States and UTs. Starting from October 23,
2020, the borrowings were completed in 20 weekly installments.
Under
the special window, the government has been borrowing in government
bonds with a tenure of three years and five years. The borrowings made
under each tenure are equally divided
among all the States according to their GST compensation shortfall.
With the current release, the proportionate pending GST shortfall with
respect to borrowing under both five- and three-year tenure has been
concluded for 23 States and three UTs with legislature.
The remaining five States don’t have any GST compensation shortfall,
the ministry added.
“The
total amount of Rs 1,10,208 crore has been borrowed by the Central
government through the special borrowing window at a weighted average
interest rate of 4.8473 per cent,” the ministry
said.
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