Central Government releases ₹ 6,000 crore as second tranche to 16 states and 3 Union Territories on account of GST compensation under Special Borrowing Window

Ministry of Finance has facilitated loans of ₹ 12,000 crore till date under the Special Window to States/UTs

The Ministry of Finance, Government of India, under its “Special Window to States for meeting the GST Compensation Cess shortfall,” will be releasing an amount of ₹ 6000 crore as second tranche to 16 States and 3 Union Territories today. This amount was raised at a weighted average yield of 4.42 per cent. This amount will be passed on to the States/UTs at the same interest rate, which is lower than the cost of borrowings for the States and UTs, thus benefitting them.  Ministry of Finance has facilitated loans of ₹ 12,000 crore till date under the Special Window to States/UTs.

21 States and 3 Union Territories till date, have opted for the Special Window under Option I. The loans raised by GoI are released on a back-to-back basis to States/UTs, in lieu of GST Compensation Cess releases.  The loans have been released to the following States and Union Territories - Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, UT of Delhi, UT of Jammu and Kashmir and UT of Puducherry.

 

Special Borrowing Window enables central loans to states for GST compensation, passed through at the Centre's borrowing rate benefiting states. The Special Borrowing Window permits the Central Government to raise market loans and on-lend them on a back-to-back basis to States and Union Territories to meet GST compensation cess shortfalls, passing through the same interest rate charged to the Centre so as to lower the States' and UTs' borrowing costs.