Govt releases remaining ₹ 44,000 cr to states and UTs as loan facility in-lieu of GST compensation
The Ministry of Finance, on October 28, released Rs 44,000 crore to the states and Union Territories (UTs) with Legislature under the back-to-back loan facility in lieu of GST compensation.
The said amount has been allocated to 23 states and three UTs as per their requirements and three Northeastern states were allocated their share with Assam receiving Rs 490.76 crore followed by Tripura and Meghalaya with Rs 111.34 crore and Rs 39.18 crore, respectively.
Of the 23 states, Karnataka got the highest amount of Rs 5010.90 crore, followed by Gujarat and Punjab with an allotment of Rs 3608.53 crore and Rs 3357.48 crore, respectively.
The release of Rs 44,000 crore being made now is funded from borrowings of the government of India in 5-year securities issued in the current financial year, at a Weighted Average Yield of 5.69%. No additional market borrowing by Central Government is envisaged on account of this release.
It is expected that this release will help the states/UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.
The total amount released in the current financial year as back-to-back loan in-lieu of GST compensation stands at Rs 1,59,000 crore. This release is in addition to normal GST compensation being released every two months out of actual cess collection.
The Finance Ministry had earlier released an amount of Rs 1,15,000 crore (Rs 75,000 crore released on July 15, 2021, and Rs 40,000 crore released on October 7, 2021).
The government had decided to borrow Rs 1.59 lakh crore and release it to states and UTs to meet the resource gap due to the short release of compensation on account of inadequate amount in the compensation fund after the 43rd GST Council Meeting held on May 28, 2021.
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