The GST Council, in its meeting on May 28, had decided that the central government would take a loan of Rs 1.59 lakh crore and release it to the states and union territories with legislatures to meet the resource crunch due to less compensation being released.
The government has released Rs 75,000 crore to compensate states and union territories for shortfall in Goods and Services Tax (GST) revenue. The GST Council, in its meeting on May 28, had decided that the central government would take a loan of Rs 1.59 lakh crore and release it to the states and union territories with legislatures to meet the resource crunch due to less compensation being released. Due to insufficient amount in the Compensation Fund, less amount was released under Compensation Head.
The Ministry of Finance today released Rs 75,000 crore to the States and Union Territories with Legislative Assemblies as a loan facility against GST compensation, the Finance Ministry said in a statement. This is in addition to the normal GST compensation to be released every two months from the actual cess collection.
The statement said that all the eligible states and union territories (having the assembly) have agreed to finance (borrowing one after the other) to make up for the shortfall in compensation.
✅₹ 75,000 crore released to States and UTs with Legislature as GST Compensation shortfall
✅Almost 50 % of the total shortfall for the entire year released in a single instalment
Read more➡️ https://t.co/I1y4kRMMDw
— Ministry of Finance (@FinMinIndia) July 15, 2021
About 50 percent of the total estimated shortfall released
According to the ministry, all the states and union territories have to play an important role for effective handling and management of the COVID-19 epidemic and regarding capital expenditure.
To support the efforts of the states and union territories, the Finance Ministry today released Rs 75,000 crore (about 50 percent of the total estimated shortfall) for the financial year 2021-22. The balance amount will be released in fixed installments in the second half of 2021-22.
An amount of Rs 75,000 crore is being financed by the Government of India in the current financial year by a total of Rs 68,500 crore from 5-year securities and Rs 6,500 crore from 2-year securities, which are 5.60 per cent and 4.25 per cent of the weighted average earnings respectively. are the ones.
It is anticipated that this amount will help the States/UTs to plan their public expenditure in improving health infrastructure and taking forward infrastructure projects, among other things.
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