9th Instalment of ₹ 6,000 crore released to the States as back to back loan to meet the GST compensation shortfall.

A total amount of ₹ 54,000 crore released so far to all States and UTs with legislation

This is in addition to additional borrowing permission of ₹ 1,06,830 lakh crore granted to the States

The Ministry of Finance has released the 9^thweekly instalment of ₹ 6,000 crore to the States to meet the GST compensation shortfall. Out of this, an amount of ₹ 5,516.60 crore has been released to 23 States and an amount of ₹ 483.40 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.

The Government of Indiahad 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 borrwoings are being done through this window by the Government of India on behalf of the States and UTs.  The borrowings have been done in 9 rounds. The amount borrowed so far was released to the States on 23^rd October, 2020, 2^nd November, 2020, 9^th November, 2020, 23^rd November, 2020, 1^st December, 2020, 7^th December, 2020, 14^th December, 2020, 21^st December, 2020 and 28^thDecember, 2020.

The amount released this week was the 9^th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.1508%.So far, an amount of ₹ 54,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7488%. 

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-Ito meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have been given their preference for Option-I. Permission for borrowing the entire additional amount of ₹ 1,06,830 lakh 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.                                                                                            

Statewise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 28.12.2020

(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	1307.43
2	Arunachal Pradesh*	143	0.00
3	Assam	1869	562.60
4	Bihar	3231	2208.94
5	Chhattisgarh	1792	677.04
6	Goa	446	475.12
7	Gujarat	8704	5217.08
8	Haryana	4293	2462.12
9	Himachal Pradesh	877	971.39
10	Jharkhand	1765	367.80
11	Karnataka	9018	7019.23
12	Kerala	4,522	1583.88
13	Madhya Pradesh	4746	2569.63
14	Maharashtra	15394	6776.23
15	Manipur*	151	0.00
16	Meghalaya	194	63.29
17	Mizoram*	132	0.00
18	Nagaland*	157	0.00
19	Odisha	2858	2162.29
20	Punjab	3033	2296.12
21	Rajasthan	5462	1909.72
22	Sikkim*	156	0.00
23	Tamil Nadu	9627	3531.02
24	Telangana	5017	818.16
25	Tripura	297	128.10
26	Uttar Pradesh	9703	3398.37
27	Uttarakhand	1405	1310.46
28	West Bengal	6787	1217.14
	Total (A):	106830	49033.16
1	Delhi	Not applicable	3318.01
2	Jammu & Kashmir	Not applicable	1285.29
3	Puducherry	Not applicable	363.54
	Total (B):	Not applicable	4966.84
	Grand Total (A+B)	106830	54000.00

* These States have ‘NIL’ GST compensation gap

GST compensation shortfall funding: back-to-back central borrowings supplied to states as loans to meet revenue gaps. The Central Government disbursed another tranche of back-to-back loans under a specially created borrowing window to meet GST compensation shortfalls, passing funds raised on behalf of States and UTs to eligible recipients at the applicable borrowing interest rate; separately, States choosing the designated option were granted permission to raise additional borrowing up to a capped share of GSDP to address revenue gaps, with a statewise schedule distinguishing amounts released through the special window and additional borrowing permissions.