GST Compensation Shortfall Released to States Reaches Rs 1 Lakh Crore

The Ministry of Finance on Friday announced the 17th weekly installment of Rs 5,000 crore to the States to fulfill the GST reimbursement shortfall.

Out of this, an amount of Rs. 4,730.41 crore has been released to 23 States and an amount of Rs. 269.59 crore has been released to the 3 Union Territories who are members of the GST Council.

To date, 91% of the total expected GST payout deficit has been issued to the States & UTs by the Legislative Assembly. Out of this sum, Rs. 91,460.34 crore has been released to the States and Rs. 8,539.66 crore has been released to the 3 UTs with the Legislative Assembly.

In October 2020, the Government of India set up a special funding window to resolve the projected revenue shortfall of Rs. 1.10 lakh crore due to the implementation of the GST.

Under the special window, the Government of India has lent three years and five years of Government Stock. The borrowing made under each tenor is evenly divided among all the States as per their GST compensation shortfall.

The amount was lent at an interest rate of 5.5924% this week. So far, an amount of Rs 1.000.000 crore has been lent by the Central Government through a special borrowing window at an average interest rate of 4.8307%.

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