12th Instalment of ₹ 6,000 crore released to the States as back to back loan to meet the GST compensation shortfall.

A total amount of ₹ 72,000 crore released so far to all States and UTs with legislation

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

The Ministry of Finance, Department of Expenditure has released the 12^th weekly instalment of ₹ 6,000 crore to the States today 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.

Till now, 65 percent of the total estimated GST compensation shortfall has been released to the States & UT with Legislative Assembly. Out of this, an amount of ₹ 65,582.96 crore has been released to the States and an amount of ₹ 6,417.04 crore has been released to the 3 UTs with Legislative Assembly.

The Government of India had 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 borrowings are being done through this window by the Government of India on behalf of the States and UTs.  12 rounds of borrowings have been completed so far starting from 23^rd October, 2020.

The amount released this week was the 12^th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.4315%. So far, an amount of ₹ 72,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7024%. 

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

State wise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 18.01.2021

(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	1684.89
2	Arunachal Pradesh*	143	0.00
3	Assam	1869	724.96
4	Bihar	3231	2846.74
5	Chhattisgarh	1792	1184.82
6	Goa	446	612.31
7	Gujarat	8704	6723.29
8	Haryana	4293	3172.91
9	Himachal Pradesh	877	1251.83
10	Jharkhand	1765	643.65
11	Karnataka	9018	9045.61
12	Kerala	4,522	2525.64
13	Madhya Pradesh	4746	3311.47
14	Maharashtra	15394	8732.41
15	Manipur*	151	0.00
16	Meghalaya	194	81.59
17	Mizoram*	132	0.00
18	Nagaland*	157	0.00
19	Odisha	2858	2786.53
20	Punjab	3033	3661.36
21	Rajasthan	5462	2661.67
22	Sikkim*	156	0.00
23	Tamil Nadu	9627	4550.36
24	Telangana	5017	1206.87
25	Tripura	297	165.00
26	Uttar Pradesh	9703	4379.49
27	Uttarakhand	1405	1688.73
28	West Bengal	6787	1940.83
	Total (A):	106830	65582.96
1	Delhi	Not applicable	4275.94
2	Jammu & Kashmir	Not applicable	1656.36
3	Puducherry	Not applicable	484.74
	Total (B):	Not applicable	6417.04
	Grand Total (A+B)	106830	72000.00

* These States have ‘NIL’ GST compensation gap

Back-to-back loan to States covers GST compensation shortfall via a central special borrowing window. A twelfth weekly back-to-back loan instalment was borrowed by the Centre through a special borrowing window and released to States and UTs with legislatures to meet the GST compensation shortfall; cumulatively twelve rounds have passed Rs. 72,000 crore to subnational governments (about 65% of the estimated shortfall) and were raised at an average interest of 4.7024%. Separately, additional borrowing permission equal to 0.50% of GSDP was granted to 28 States that opted for Option I to mobilize further resources.