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The Central government on Friday borrowed and transferred Rs. 6,000 crores as first tranche on account of GST compensation to 16 states and two Union Territories (UTs).
These states and UTs include Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh and Uttarakhand, and Delhi and Jammu and Kashmir respectively.
Out of these, five states did not have any shortfall on account of GST compensation.
“The Government of India has evolved a special borrowing window to address the 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,” the Ministry said in a statement.
The borrowing is at an interest rate of 5.19 per cent. It is intended to make weekly releases of Rs. 6,000 crore to the States. The tenor of borrowing is expected to be broadly in the range of 3 to 5 years.
Recently, the Centre gave in to the demands of opposition-ruled states to borrow and fund the GST compensation shortfall.
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