Centre releases Rs 40,000 crore to states as back-to-back loan for GST shortfall
The finance ministry on Thursday released Rs 40,000 crore to states and Union territories to compensate them for the shortfall in GST revenues, taking the total amount released as loan so far this fiscal year to Rs 1.15 lakh crore. The Centre had released Rs 75,000 crore on this count in July.
A government release said the Centre has borrowed and loaned out 72 per cent of the planned amount of Rs 1.59 lakh crore for the fiscal to meet the shortfall in collections. The loans are in addition to the cess distributed to the states as compensation for the shortfall.
The 43rd GST Council meeting on May 28, 2021 had decided that the central government would borrow Rs 1.59 lakh crore in 2021-22 and release it to states and Union territories as loans to meet the shortfall in collections.
A sum of Rs 1.10 lakh crore was given to the states under a similar arrangement in the last fiscal.
The government said besides the loan of Rs 1.59 lakh crore, the states would get cess of more than Rs 1 lakh crore.
“The release of Rs 40,000 crore made today is funded from borrowings of GoI in 5-year securities, totalling Rs 23,500 crore and 2-year securities for Rs 16,500 crore issued in the current financial year, at a weighted average yield of 5.69 and 4.16 per cent per annum respectively. No additional market borrowing by the central government is envisaged on account of this release,” the statement said.