The federal government has launched Rs 1 lakh crore to states and union territories in 4 months since October 2020, to fulfill the nice and companies (GST) compensation shortfall, the Ministry of Finance stated in a press release on Saturday, February 20. The Finance Ministry launched the seventeenth weekly installment of Rs.5,000 crore to the states with the intention to meet the GST compensation shortfall. Out of this, an quantity of Rs. 4,730.41 crore was launched to 23 States and an quantity of Rs. 269.59 crore was launched to the three union territories, viz. Delhi, Jammu & Kashmir and Puducherry, that are members of the products and companies (GST) council, in accordance with the Finance Ministry’s assertion.
The remaining 5 states – Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim should not have a niche in income on account of the GST implementation. To this point, 91 p.c of the whole estimated GST compensation shortfall has been launched to states and union territories. Out of this, an quantity of Rs. 91,460.34 crore has been launched to the states and an quantity of Rs. 8,539.66 crore has been launched to the three union territories with Legislative Meeting.
The federal government had arrange a particular borrowing window in October 2020, with the intention to meet the estimated shortfall of Rs. 1.10 lakh crore in income arising on account of the implementation of GST. Below the particular window, the federal government has been borrowing in Authorities Inventory with the tenor of three years and 5 years. The borrowing made below every tenor is equally divided amongst all of the states as per their GST compensation shortfall.
In response to the Finance Ministry, the quantity launched this week was the seventeenth installment of such funds supplied to the states. This week, the quantity was borrowed at an rate of interest of 5.5924 per cent. To this point, an quantity of Rs. 1,00,000 crore has been borrowed by the federal government by the particular borrowing window at a mean rate of interest of 4.8307 per cent. Ranging from October 23, 2020, a complete of 17 rounds of borrowings have been accomplished to date.