Amritsar, NFA Post: Department of Expenditure of Ministry of Finance has released the 17th weekly instalment of 5,000 crore rupees to 23 states and three union territories with Legislative Assembly, taking the total amount released so far under the special borrowing window to 100,000 crore rupees.
The Central government had set up a special borrowing window in October 2020 to meet the estimated shortfall of 110,000 crore rupees in revenue arising on account of the implementation of GST.
The government is carrying out borrowings through this window on behalf of states and UTs.
The Centre, under this special window, has been borrowing in government stock with tenor of three years and five years. The borrowing made under each tenor is equally divided among all states as per their GST compensation shortfall.
A total of 17 rounds of borrowings have been completed till now starting from October 23, 2020, and the Central government has so far borrowed an amount of 100,000 crore rupees through the special borrowing window at an average interest rate of 4.83%, the ministry said in a statement on Saturday.
“In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50% of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have given their preference for Option-I. Permission for borrowing the entire additional amount of Rs. 106,830 crore (0.50 % of GSDP) has been granted to 28 States under this provision,” the ministry said.
Out of the fund released as the 17th instalment, an amount of 4,730.41 crore rupees was released to 23 states, and an amount of 269.59 crore rupees was given to the three UTs with the Legislative Assembly — Delhi, Jammu and Kashmir, and Puducherry.
The remaining five states, Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim do not have a gap in revenue on account of GST implementation, the ministry said.
After the current release, the proportionate pending GST shortfall with respect to borrowing under 5 years tenor has been concluded for 16 states and two UTs, the ministry said.
Till now, 91% of the total estimated GST compensation shortfall has been released to states and UTs with Legislative Assembly, out of which 91,460.34 crore rupees has been released to the states, and an amount of 8,539.66 crore rupees has been released to the three UTs, it added.