The central government has released the sixth weekly instalment of Rs 6,000 crore to the states to meet the GST compensation shortfall, the government said on Wednesday. This amount has been borrowed at the interest rate of 4.2%.
The government has so far disbursed Rs 36,000 crore to states in back-to-back loan arrangement after borrowing the amount on behalf of states. The average interest rate for the borrowing under special window so far stood at 4.71%, the government said.
“Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 union territories with legislative assembly (Delhi, Jammu & Kashmir and Puducherry) which are members of the GST Council,” the government said.
The government has calculated the GST compensation shortfall on account of implementation to be Rs 1.1 lakh crore this fiscal, an amount that would be paid to states by the end of FY 21 though borrowing as the designated cess fund is inadequate.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the government has also granted additional borrowing permission equivalent to 0.5% of states’ GSDP to those choosing option-1 to meet GST compensation shortfall.
So far, permission for borrowing an additional amount of Rs 1,06,830 crore has been granted to 28 states under this provision, the government said.