Home » Business » Government of India releases ₹ 40,000 crore to States/ UTs with Legislature in-lieu of GST compensation shortfall

Government of India releases ₹ 40,000 crore to States/ UTs with Legislature in-lieu of GST compensation shortfall

Newdelhi:7/10/21:The Ministry of Finance today released an amount of ₹40,000 crore to the States and UTs with Legislature under the back-to-back loan facility to meet the shortfall in GST Compensation.  Earlier on 15th July 2021, an amount of ₹75,000 crores was released to the States & UTs with the legislature. With the current release, the total amount released in the current financial year as back-to-back loan in-lieu of GST compensation has reached ₹1,15,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection. Odisha received Rs 1617.65 Cr to meet GST compensation shortfall

Subsequent to the 43rd GST Council Meeting held on 28.05.2021, it has been decided by the Central Government that it would borrow ₹1.59 lakh crore in 2021-22 and release it to States and UTs with Legislature on a back-to-back basis to meet the resource gap due to the short release of Compensation on account of the inadequate amount collected in the Compensation Fund. This amount is as per the principles adopted for a similar facility in FY 2020-21, where an amount of ₹1.10 lakh crore was released to States under a similar arrangement.

This amount of ₹1.59 lakh crore to be provided to States as the back-to-back loan would be over and above the compensation, in excess of ₹1 lakh crore (based on cess collection), that is estimated to be released to States/UTs with Legislature during the current financial year. The sum total of ₹2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY 2021-22.

All eligible States and UTs (with Legislature) have agreed to the arrangements of funding of the compensation shortfall under the back-to-back loan facility. For effective response and management of COVID-19 pandemic and a step-up in capital expenditure all States and UTs have a very important role to play. For assisting the States/UTs in their endeavor, the Ministry of Finance has frontloaded the release of assistance under the back-to-back loan facility during FY 2021-22 of ₹1,15,000 crore (more than 72 percent of the total estimated shortfall for the entire year). The balance amount will be released in due course.

The release of ₹40,000 crores made today is funded from borrowings of GoI in 5-year securities, totaling ₹23,500 crores and  2-year securities for ₹16,500 crore issued in the current financial year, at a Weighted Average Yield of 5.69 and 4.16 percent per annum respectively.  No additional market borrowing by the 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.

State/ UTs wise amount released as “Back to Back Loan in lieu of GST Compensation Shortfall” on 07.10.2021

 (Rs. in Crore)

Sl. No. Name of the State/ UTs GST Compensation shortfall released
5 year tenor 2 year tenor Total
1. Andhra Pradesh  483.61  339.56 823.17
2. Assam  262.20 184.10 446.30
3. Bihar 1,007.42 707.34 1,714.76
4. Chhattisgarh  733.84 515.25 1249.09
5. Goa 125.19  87.90 213.09
6. Gujarat 1,927.34 1,353.24 3,280.58
7. Haryana 1,092.85 767.32 1,860.17
8. Himachal Pradesh  398.33  279.68 678.01
9. Jharkhand  367.14  257.78 624.92
10. Karnataka 2,676.56 1,879.28 4,555.84
11. Kerala 1,291.65  906.90 2,198.55
12. Madhya Pradesh 1,036.24 727.57 1,763.81
13. Maharashtra 2,037.01 1,430.24 3,467.25
14. Meghalaya 20.84 14.63 35.47
15. Odisha 950.37 667.28 1617.65
16. Punjab 1,793.14 1,259.01 3,052.15
17. Rajasthan 1,074.23 754.25 1,828.48
18. Tamil Nadu 1,196.46 840.07 2,036.53
19. Telangana  675.31  474.15 1149.46
20. Tripura 59.27  41.61 100.88
21. Uttar Pradesh  1,203.11  844.74 2,047.85
22. Uttarakhand 492.63 345.89 838.52
23. West Bengal 949.63 666.76 1616.39
24. UT of Delhi  915.34 642.69 1558.03
25. UT of Jammu & Kashmir 568.30 399.02 967.32
26. UT of Puducherry 161.99 113.74 275.73
  Total: 23,500.00 16,500.00 40,000.00

 

About Editor in chief

Ashok Palit has completed his graduation from Upendranath College Soro, Balasore and post graduation from Utkal University in Odia Language and literture.. He has also carved out a niche for himself as a scribe of eminence after joining the profession in 1988. He is also an independent media production professional. He brings loads of experience to Advanced Media, Ashok Palit as a cineaste has been active in film criticism for over three decades. As a film society activist, he soared to eminence for his profound commitment to the art film appreciation and aesthetics of cinema. His mode of discourse is often erudite but always lucid and comprehensible marked by a perfect acumen so rare in the field. A film aesthete with an immense fond of critical sensibilities, he wrote about growth and development of odia cinema in New Indian Express, The Times of India, The Hindustan Times, The Asian Age and Screen. He has been working as an Editor for Cine Samaya from 2002-2004.. He had made solid contribution on cinema in many odia Dailies and weekly such as Samaj, Prajatantra, Dharatri, Samaya, Satabadi, and weekly Samaya.

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