The Centre has released the seventh instalment of ₹6,000 crore as back-to-back loan to meet the GST compensation shortfall. With this, a total of ₹42,000 crore has been released.

All 28 States and 3 Union Territories (UTs) are eligible to get a share of this arrangement. However, only 23 States are getting part of borrowing as they are facing shortfall. Apart from back-to-back loan arrangement, additional borrowing permission of over ₹1.06-lakh crore has been granted to the States.

According to a Finance Ministry statement, 23 States got ₹5,516.60 crore and ₹483.40 crore has been released to the three Union Territories with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council.

Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

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Special window

The Centre had set up a special borrowing window in October to meet the estimated shortfall of ₹1.10-lakh crore in revenue arising on account of implementation of GST.

The amount was borrowed this week at an interest rate of 5.13 per cent and average interest rate of all seven instalments was 4.77 per cent.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the government has also granted additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product to the States choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

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