In 17th instalment, Govt releases GST compensation of Rs 5,000 crore for states
New Delhi, Feb 20: The government has released the GST compensation of Rs 5,000 crore for states in the 17th instalment, the finance ministry said in a release.
The ministry also said that a chunk of the financial aid has been borrowed this week at an interest of 5.5994 per cent.
"So far, an amount of Rs. 1,00,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.8307%," a release from the Finance Ministry read.
The government had set up a special borrowing window in October 2020 to meet the estimated shortfall of ₹1.10 lakh crore in revenue arising on account of implementation of GST, the ministry also said.
"Under the special window, the Government of India has been borrowing in government stock with a tenor of 3 years and 5 years. The borrowing made under each tenor is equally divided among all the states as per their GST compensation shortfall. With the current release, the proportionate pending GST shortfall with respect to borrowing under 5 years tenure has been concluded for 16 states and two UTs.
These states and UTs were onboard for GST compensation release from the first Instalment," the release also read.
The ministry statement also said that all the states have given their preference for Option-I. Permission for borrowing the entire additional amount of ₹1,06,830 crore (0.50% of GSDP) has been granted to 28 states under this provision.