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Finance Ministry Releases Rs 40,000 Crore To Meet GST Compensation Shortfall

It added that the total amount disbursed as back to back in lieu of GST compensation reached Rs 1.15 lakh crore for the current financial year.

Finance Ministry Releases Rs 40,000 Crore To Meet GST Compensation Shortfall
Finance Ministry Releases Rs 40,000 Crore To Meet GST Compensation Shortfall
outlookindia.com
2021-10-07T18:27:23+05:30

Ministry of Finance released Rs 40,000 crore to states and union territories to meet the shortfall in GST compensation under the back-to-back loan facility on Thursday. It added that the total amount disbursed as back to back in lieu of GST compensation reached Rs 1.15 lakh crore for the current financial year. The ministry clarified that the disbursal was in addition to the normal GST compensation that is released every two months out of the actual cess collection. 

The ministry informed that the amount being disbursed today would be funded from borrowings of the Government of India in five-year securities, which totals Rs 23,500 crores and two-year securities for Rs 16,500 crore in the current financial year. They draw a weighted average yield of 5.69 and 4.16 per cent per annum respectively. "No additional market borrowing by the Central Government is envisaged on account of this release," the press statement informed. 

It said that for assisting states and union territories in effective management and response to the COVID-19 pandemic,  the ministry decided to frontload the release of assistance under the back-to-back loan facility during FY 2021-22 of ₹1,15,000 crore (more than 72 per cent of the total estimated shortfall for the entire year. The balance amount will be released in due course.

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