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GST compensation shortfall released to States reaches ₹ 1.04 Lakh crore

March 1, 2021
  • Contents

GST compensation shortfall released to States reaches ₹ 1.04 Lakh crore

18th Instalment of ₹ 4,000 crore released to the States on Monday, 1st March, 2021

94 percent of the estimated shortfall released

The Ministry of Finance, Department of Expenditure has on Friday, released the 18th weekly instalment of ₹ 4,000 crore to the States to meet the GST compensation shortfall. Out of this, an amount of ₹ 3,677.74 crore has been released to 23 States and an amount of ₹ 322.26 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

Till now, 94 percent of the total estimated GST compensation shortfall has been released to the States & UTs with Legislative Assembly. Out of this, an amount of ₹ 95,138.08 crore has been released to the States and an amount of ₹ 8,861.92 crore has been released to the 3 UTs with Legislative Assembly.

The Government of India had set up a special borrowing window in October, 2020 to meet the estimated shortfall of ₹ 1.10 Lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the Government of India on behalf of the States and UTs. 18 rounds of borrowings have been completed so far starting from 23rd October, 2020.

Under the special window, the Government of India has been borrowing in Government Stock with tenor of 3 years and 5 years. The borrowing made under each tenor is equally divided among all the States as per their GST compensation shortfall.

The amount released this week was the 18th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.7924%. So far, an amount of ₹ 1,04,000 crore has been borrowed by the Central Government through the special borrowing window at an weighted average interest rate of 4.8236%. 

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have given their preference for Option-I. Permission for borrowing the entire additional amount of ₹ 1,06,830 crore (0.50 % of GSDP) has been granted to 28 States under this provision.

The amount of additional borrowing permission granted to 28 States and the amount of funds raised through special window and released to the States and Union Territories so far is annexed.

State wise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 01.03.2021

(Rs. in Crore)

S. No.

Name of State / UT

Additional borrowing of 0.50 percent allowed to States

Amount of fund raised through special window passed on to the States/ UTs

1

Andhra Pradesh

5051

2306.59

2

Arunachal Pradesh*

143

0.00

3

Assam

1869

992.12

4

Bihar

3231

3897.50

5

Chhattisgarh

1792

2256.59

6

Goa

446

838.38

7

Gujarat 

8704

9204.31

8

Haryana

4293

4343.62

9

Himachal Pradesh 

877

1713.71

10

Jharkhand

1765

1225.90

11

Karnataka

9018

12383.13

12

Kerala

4,522

4513.40

13

Madhya Pradesh

4746

4533.28

14

Maharashtra

15394

11954.02

15

Manipur*

151

0.00

16

Meghalaya

194

111.80

17

Mizoram*

132

0.00

18

Nagaland*

157

0.00

19

Odisha

2858

3814.67

20

Punjab

3033

6542.97

21

Rajasthan

5462

4248.81

22

Sikkim*

156

0.00

23

Tamil Nadu

9627

6229.05

24

Telangana

5017

2027.33

25

Tripura

297

225.54

26

Uttar Pradesh

9703

5995.48

27

Uttarakhand

1405

2311.55

28

West Bengal

6787

3468.33

 

Total (A):

106830

95138.08

1

Delhi

Not applicable

5853.76

2

Jammu & Kashmir

Not applicable

2267.62

3

Puducherry

Not applicable

740.54

 

Total (B):

Not applicable

8861.92

 

Grand Total (A+B)

106830

104000.00

* These States have ‘NIL’ GST compensation gap

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