Image Source: latestly.comFinance Minister, Nirmala Sitharaman, released the 13th weekly installment to compensate for the GST shortfall. The government set up the special borrowing window in October 2020 to compensate for the estimated shortfall of Rs. 1.1 lakh crore in revenue arising on the account of GST implementation. Till now, 70% of the amount has been released i.e. 78,000 crores. The borrowing will not burden the fiscal deficit of the government as they will be shown as the capital receipts of the state government and as part of financing its respective fiscal deficits.
The amount released for this week was borrowed at the interest rate of 5.30. Compensation has been given to 23 states and 3 Union Territories with legislative assembly ( Jammu and Kashmir, Delhi, and Puducherry). The other 5 states, which are Arunachal Pradesh, Nagaland, Sikkim, Manipur, and Mizoram do not have any loss in revenue due to the implementation of GST.
Finance Ministry gave a statement: "So far, an amount of Rs 78,000 crore has been borrowed by the central government through the special borrowing window at an average interest rate of 4.74 percent."
In addition to this funding, the Centre has also granted additional borrowing permission worth 0.5% of Gross States Domestic Product(GSDP) to the states to mobilize additional financial resources