Ministry of Finance has released Rs 75,000 crore to the States and Union Territories (UTs) with legislature under the back-to-back loan facility in lieu of Goods and Services Tax (GST) compensation.
This release is in addition to normal GST compensation being released every 2 months out of actual cess collection. The release of Rs 75,000 crore being made now is funded from borrowings of GoI in 5-year securities, totalling Rs 68,500 crore and 2-year securities for Rs 6,500 crore issued in the current financial year, at a Weighted Average Yield of 5.60 and 4.25 percent per annum respectively.
As per the Ministry of Finance’s notification, 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.