The Government of India has evolved a special borrowing window to addressthe shortfall in the GST collection during the year 2020 – 2021. 21 States and 2 Union Territories opted for this special window involving back-to-back borrowing coordinated by the Ministry of Finance.

Out of these, five States did not have any shortfall on account of GST compensation.  Today, the Central Government borrowed and transferred ₹ 6,000crores as first tranche to 16 States namely Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhandand 2 Union Territories: UT of Delhi and UT of Jammu and Kashmir.

The borrowing is at an interest rate of 5.19 percent.It is intended to make weekly releases of ₹ 6,000 croreto the States.Tenor of borrowing is expected to be broadly in the range of 3 to 5 years.

Special borrowing window for GST compensation shortfall enables central back-to-back loans to states with weekly tranches and defined tenor. A special borrowing window was used to address the 2020-21 GST compensation shortfall through coordinated back-to-back borrowings. The Central Government borrowed and transferred an initial tranche of funds to sixteen States and two Union Territories. The borrowing carries an interest rate of 5.19 percent, contemplates weekly releases under the scheme, and has an expected tenor broadly in the range of three to five years to provide targeted liquidity support for GST compensation.