Centre releases Rs 1.04 lakh crore GST compensation shortfall to states since October


The Centre has released Rs 1.04 lakh crore to states in four months since October 2020, to meet GST compensation shortfall, the finance ministry said on Monday.

The ministry on Monday released the 18th weekly instalment of Rs 4,000 crore to 23 states and 3 Union territories with Legislative Assembly (Delhi, Jammu & Kashmir and Puducherry), taking the total amount released so far under the special borrowing window set up in October last year to Rs 1.04 lakh crore.

The remaining 5 states, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of the goods and services tax (GST) implementation.

The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of the implementation of GST. The borrowings are being done through this window by the Centre on behalf of the states and UTs.

Under the special window, the Centre has been borrowing in government stock with tenures of 3 years and 5 years. The borrowing made under each tenure is equally divided among all the states as per their GST compensation shortfall.

“Till now, 94 per cent of the total estimated GST compensation shortfall has been released to the states and UTs with Legislative Assembly.

“Out of this, an amount of Rs 95,138.08 crore has been released to the states and an amount of Rs 8,861.92 crore has been released to the 3 UTs with Legislative Assembly,” the statement added.

Eighteen rounds of borrowings have been completed so far starting from October 23, 2020.

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