States, UTs get Rs 1.59 lakh crore from Centre to offset GST shortfall
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New Delhi: With the recent release of Rs 44,000 crore to States as loans to offset the GST shortfall, the Centre has released a total of Rs 1.59 lakh crore this fiscal. The loans are additional to what the States are getting GST compensation in every two months from the cess collection.
Releasing the loans, the Finance Ministry said in a statement that the fund could the funds could help the States and Union Territories to plan their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.
The States and Union Territories are getting the loans on the agreement the 43rd GST Council Meeting on May 28, 2021, had taken to compensate for the GST shortfall. As per the agreement, the Centre would borrow Rs 1.59 lakh crore in 2021-22 and release it to states and UTs with the legislature on a back-to-back basis.
The funding in the form of loans is expected to help the States and UTs when most of the States are experiencing cash crunch due to poor revenue collections impacted by several fronts, including COVID induced lockdowns.
On July 15 and October 7, the Centre had released Rs 75,000 crore and Rs 40,000 crore, respectively, to the states. With the release of funds on Thursday, the total amount that has reached a back-to-back loan in-lieu of GST compensation is Rs 1.59 lakh crore.
The highest amount of Rs 5,010.90 crore has been issued to Karnataka, followed by Rs 3,814 crore to Maharashtra, Rs 3,608.53 crore to Gujarat, and Rs 3,357.48 crore to Punjab, among others.