Finance ministry says, due to GST implementation, five states -- Manipur, Mizoram, Nagaland, Arunachal Pradesh and Sikkim -- do not have a gap in revenue
The finance ministry's Department of Expenditure released the 18th weekly instalment of Rs 4,000 crore to meet the GST compensation shortfall to states. Of this, an amount of Rs 322.26 crore has been released to the three Union Territories (UT) with Legislative Assembly -- Delhi, Jammu and Kashmir and Puducherry -- which are members of the GST Council. Apart from this, Rs 3,677.74 crore has been released to 23 states, the finance ministry said in a statement.
Due to GST implementation, the remaining five states — Manipur, Mizoram, Nagaland, Arunachal Pradesh and Sikkim — do not have a gap in revenue, the release read.
Around 94 percent of overall projected GST compensation shortfall has been given to states and UTs with Legislative Assembly. Out of this, an amount of Rs 8,861.92 crore has been given to the three UTs. Moreover, an amount of Rs 95,138.08 crore has been released to the states.
To meet the projected deficit of Rs 1.10 lakh crore in revenue, the government established a special borrowing window in October 2020. The shortfall was arising due to implementation of GST.
Through this window, the borrowings are being done by the government on behalf of states and UTs and so far, 18 rounds of borrowings have been finished beginning from October 23, 2020.
With tenor of three years and five years, the government has been borrowing in Government Stock, as a part of the special window. According to their GST compensation deficit, the borrowing made under each tenor is equally divided among all the states, the finance ministry said.
The amount offered was the 18th instalment of such funds given to the states. This week, the government has borrowed the amount at an interest rate of 4.7924 percent. As of now, overall Rs 1,04,000 crore has been borrowed by the Centre at a weighted average interest rate of 4.8236 percent.