The Ministry of Finance today released an amount of Rs 40,000 crore to the States and UTs with Legislature under the back-to-back loan facility to meet the shortfall in GST Compensation.
According to a PIB press release, Rs 100.88 crore have been released for Tripura on October 7, 2021. Out of this, Out of the total Rs100.88 crore, Rs 59.27 crore will be funded from the borrowings of Government of India in 5-year securities and 2-year securities for Rs 41.61 crore.
Earlier on July 15, 2021 an amount of Rs 75,000 crore was released to the States & UTs with legislature. With the current release, the total amount released in the current financial year as back to back loan in-lieu of GST compensation has reached to Rs 1,15,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection.
Subsequent to the 43rd GST Council Meeting held on 28.05.2021, it has been decided by the Central Government that it would borrow Rs 1.59 lakh crore in 2021-22 and release it to States and UTs with Legislature on a back-to-back basis to meet the resource gap due to the short release of Compensation on account of inadequate amount collected in the Compensation Fund.
The release of Rs 40,000 crore made today is funded from borrowings of GoI in 5-year securities, totalling Rs 23,500 crores and 2-year securities for Rs 16,500 crore issued in the current financial year, at a Weighted Average Yield of 5.69 and 4.16 percent per annum respectively. No additional market borrowing by the Central Government is envisaged on account of this release.
It is expected that this release will help the States/UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.