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Ministry of Finance releases Rs 75,000 crore to States, UTs as GST compensation

16 Jul 2021 Evaluate

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.