The government has released the seventh tranche of Rs 6,000 crore as goods and services tax (GST) compensation payment to states this week. The amount was borrowed at an interest rate of 5.13% and disbursed to the states as back-to-back loans, the government said on Monday.
Of this amount, Rs 5,516.6 crore was allocated to 23 states while the remaining was given to the three Union Territories with legislative assembly (Delhi, Jammu & Kashmir and Puducherry) which are members of the GST Council, the government said. It added that the remaining five states namely Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in the revenue on account of GST implementation.
“So far, an amount of Rs 42,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.77%,” the government said.
The central government has to disburse Rs 1.1 lakh crore this fiscal which is estimated to state’ GST shortfall from the amount guaranteed to them under the law. Though the total shortfall is likely to be Rs 1.8 lakh crore in the current fiscal, the central government has agreed to reimburse only the gap arising out of GST implementation issue through market borrowing under a special window.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the central government has also granted additional borrowing permission equivalent to 0.5% of Gross States Domestic Product (GSDP) to the states choosing option-1 to meet GST compensation shortfall.
“All the States have been given their preference for Option-I. Permission for borrowing the entire additional amount of `1,06,830 crore (0.5 % of GSDP) has been granted to 28 states under this provision,” it said.