The Finance Ministry said that the central government has so far borrowed Rs 42,000 crore since October and released the funds to states to meet Goods and Services Tax (GST) compensation shortfall. The latest instalment of Rs 6,000 crore was released to the states on December 14, out of which Rs 5,516.60 crore has been released to 23 states and Rs 483.40 crore has been released to 3 Union Territories (UT) with legislative assemblies (Delhi, Jammu and Kashmir, and Puducherry).
The remaining 5 states -- Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim -- do not have a gap in revenue on account of GST implementation. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the Government of India on behalf of the states and UTs. The borrowings have been done in seven rounds. The amount borrowed so far was released to the states on October 23, November 2, November 9, November 23, December 1, December 7, and December 14, 2020.
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 (GSDP) to the states choosing option-I to meet GST compensation shortfall to help them in mobilizing additional financial resources.