Finance Ministry
Finance Ministry

The finance ministry on Monday said it has released the full Rs 1.10 lakh crore estimated GST compensation shortfall to the states with the release of final weekly installment of Rs 4,104 crore.

With the release of the 20th installment, 100 per cent of the total estimated GST compensation shortfall of Rs 1.10 lakh crore for the year 2020-21 has now been released to the states and UTs with Legislative Assembly. Out of 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 UTs with Legislative Assembly, the ministry said in a statement.

The Government of India had set up a special borrowing window in October last year to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the central government on behalf of the states and UTs. Starting from October 23, 2020, the borrowings were completed in 20 weekly installments.

Under the special window, the government has been borrowing in Government Stock with a tenure of three years and five years.

The borrowings made under each tenure are equally divided among all the states as per their GST compensation shortfall. With the current release, the proportionate pending GST shortfall with respect to borrowing under both five and three year tenure has been concluded for 23 states and three UTs with legislature. The remaining five states don't have any GST compensation shortfall, the ministry added.

"The total amount of Rs 1,10,208 crore has been borrowed by the central government through the special borrowing window at an weighted average interest rate of 4.8473 per cent," it said.

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