The Department of Expenditure of the Ministry of Finance released Rs 4,104 crore under the 20th and last weekly installment to states to meet the reduction in GST revenue. Out of the released amount, Rs. 4086.97 crore has been released to 23 states and Rs. 17.03 crore has been released to the three union territories which have legislative assembly. For the financial year 2020-21 with the release of the 20th installment
100 percent amount of the total estimated GST compensation has been released to the States and Union Territories of Rs. 1.10 lakh crore.
Under this, an amount of Rs 1,01,329 crore has been released to the states and an amount of Rs 8,879 crore has been released to the three union territories having an assembly.
1.10 Lakh Crore Estimate
The Government of India had arranged a special window to compensate for the reduction in GST revenue in October 2020, under which GST compensation of Rs 1.10 lakh crore was estimated. For this, the process of lending started from October 23, 2020 is now complete after giving the 20th installment. Under this, the Government of India has been borrowing in government stocks of 3 years and 5 years duration. The loan period under the borrowings was fixed uniformly for the states, which was decided on the basis of compensating the reduction in the GST revenue of the states.
20th installment released
After releasing the current installment, the work of giving the remaining amount under 5 years and 3 years has been completed for 23 states and 3 union territories with legislative assemblies, while the GST revenue of the remaining 5 states has not decreased. The amount released to the states this week is the 20th installment. The central government has taken this amount as a loan this week at an interest of 4.9288 percent. The central government has taken a total loan of Rs 1,10,208 crore, on which it will have to pay 4.8473 percent interest on an average.
Borrowing option
Along with repaying the capital, the Government of India also gave an option to the states to borrow an additional amount of 0.50 per cent of its gross domestic product (GDP) to meet the revenue shortfall in implementing GST. For this, all the states had opted for option-1. Under this, provision has been made for additional borrowing of 1,06,830 crore (0.50 percent of the gross domestic product of the states) to 28 states. This step has also provided additional resources to the states to raise capital.
( IANS )
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