Center gave the remaining Rs 44,000 crore to the states as a loan facility for GST compensation
The funds released under the loan facility are in addition to the amount being given as GST compensation for two months. The GST compensation to the states is being given from the amount received from the cess collection.
In the 43rd meeting of the GST Council on May 28 this year, it was decided that the Center would take a loan of Rs 1.59 lakh crore in 2021-22 and release it from time to time to the states and union territories with legislatures. So as to bridge the gap in resources due to shortfall in compensation due to insufficient amount collected in GST Compensation Fund.
This amount is in line with the principle adopted in the last financial year 2020-21. During that time 1.10 lakh crore rupees were released to the states.
In a statement, the Finance Ministry said, “The ministry on Thursday released Rs 44,000 crore to the states and union territories with legislatures in lieu of GST compensation. This amount has been released under the loan facility arrangement.
Earlier, the ministry had released Rs 75,000 crore and Rs 40,000 crore on July 15 and October 7 respectively.
According to the statement, with the release of Rs 44,000 crore on Thursday, Rs 1.59 lakh crore has been given under the credit facility system in lieu of GST compensation in the current financial year.
This total amount of Rs 1.59 lakh crore is in addition to over Rs one lakh crore corpus (based on cess collection) which is estimated to be released to the States/UTs having legislatures during this financial year.
According to the statement, an amount of Rs 44,000 crore has been financed through Government of India securities issued at a weighted average return of 5.69 per cent in the current financial year.
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