16th weekly instalment of ₹5,000 crore released to States
Kerala has got another ₹252 crore from the 16th weekly instalment of ₹5,000 crore released by the Ministry of Finance, Department of Expenditure, to States to meet the Goods and Services Tax (GST) compensation shortfall.
Out of the ₹5,000 crore released, ₹4,597.16 crore has been released to 23 States and ₹402.84 crore to the Union Territories (UTs) with a Legislative Assembly — Delhi, Jammu & Kashmir, and Puducherry — that are members of GST Council.
Special borrowing window
The government 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 Centre on behalf of the States and UTs. As much as 16 rounds of borrowings have been completed so far.
The amount released as the 16th instalment to the States and UTs has been borrowed this week at an interest rate of 4.64%. So far, ₹95,000 crore has been borrowed through a special borrowing window at an average interest rate of 4.78%.
Till now, 86% of the GST compensation shortfall has been released and ₹86,729.93 crore has been released to the States and ₹8,270.07 crore to the three UTs with Legislative Assembly.
In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, additional borrowing permission equivalent to 0.50% of Gross States Domestic Product (GSDP) has been granted to States choosing Option-I to meet GST compensation shortfall to mobilise additional financial resources.
Kerala has been given permission for additional borrowing of ₹4,522 crore (0.50% allowed to States) and has so far raised ₹3,729 crore through special window passed on to the States/ UTs.
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