Udayavni Special

GST compensation: Centre borrows, transfers Rs 6,000 cr to 16 states, 2 UTs


Team Udayavani, Oct 24, 2020, 10:20 AM IST

New Delhi: The Centre has borrowed and transferred Rs 6,000 crore as the first tranche of GST compensation shortfall to 16 states and two union territories, including Maharashtra, Gujarat, Bihar, Assam, Delhi and J&K, the finance ministry said on Friday. Last week, the Centre gave in to the demands of opposition-ruled states to borrow and fund the GST compensation shortfall.

The finance ministry said the Centre would borrow from the market to pay the GST compensation shortfall of Rs 1.1 lakh crore to states, and then act as an intermediary to arrange back-to-back loans to state governments. This is the first time funds are being released as GST compensation for the current fiscal.

The ministry said the government of India has evolved a special borrowing window to address the shortfall in the GST collection during the year 2020–2021. Twenty-one states and two union territories opted for this special window involving back-to-back borrowing coordinated by the Ministry of Finance.

Out of these, five states did not have any shortfall on account of GST compensation.

“Today, the central government borrowed and transferred Rs 6,000 crore as the first tranche to 16 states namely Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand and two union territories: UT of Delhi and UT of Jammu and Kashmir,” it said in a statement.

The borrowing is at an interest rate of 5.19 per cent and tenor of borrowing is expected to be broadly in the range of 3 to 5 years, the ministry said it intends to release Rs 6,000 crore to the states every week.

This arrangement, the ministry said, will not reflect in the fiscal deficit of the Centre and will appear as capital receipts for state governments.

The Centre had in August proposed two options to states: borrow Rs 97,000 crore (on account of GST implementation) from a special window facilitated by the RBI or the complete shortfall of Rs 2.35 lakh crore (including Rs 1.38 lakh crore due to COVID) from the market.

The options have since been revised to Rs 1.10 lakh crore and Rs 1.8 lakh crore, respectively.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

K’taka COVID-19 update: 998 new cases, 2209 discharges, 13 deaths on Nov 29

Red Alert for 4 Kerala districts; CM asks people to be vigilant

No connection between cabinet exercise and announcement of panchayat polls: CM BSY

PM attacks oppn parties, says they play tricks on farmers

No social distancing at protest, farmer leaders says new laws bigger threat than COVID

Most important challenge facing region is terrorism: India at SCO

PM Modi visits Varanasi, dedicates to nation six-lane highway



Related Articles More

2021 Tibetan parliament-in-exile elections sees 80K registered voters: Official

Red Alert for 4 Kerala districts; CM asks people to be vigilant

Bhupinder Hooda Hits out at Haryana CM over Remarks on Use of Water Cannons Against Farmers

Cyclone Nivar Extensively Damaged Crops in Over 6.59 Lakh Hectares in Andhra Pradesh, Says Minister

‘Tiger State’ Madhya Pradesh Lost 290 Big Cats in 19 Years, Says Forest Department Official

MUST WATCH

What is the importance of Ayurvedic medical system in treating diseases?

Success story of a couple In Agriculture | Integrated Farming

Meet the man with the largest collections of Newspapers | Umesh Rao Ekkar Mangalore

Mangalore: Woman rescues a cat from 30 feet deep well | Ranjini Shetty | Udayavani

CM and central leadership will take final call on Cabinet expansion: Ashwath Narayan

Latest Additions

K’taka COVID-19 update: 998 new cases, 2209 discharges, 13 deaths on Nov 29

2021 Tibetan parliament-in-exile elections sees 80K registered voters: Official

Red Alert for 4 Kerala districts; CM asks people to be vigilant

Bhupinder Hooda Hits out at Haryana CM over Remarks on Use of Water Cannons Against Farmers

Cyclone Nivar Extensively Damaged Crops in Over 6.59 Lakh Hectares in Andhra Pradesh, Says Minister

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.