NEW DELHI: Finance Ministry on Thursday released an amount of Rs 40,000 crore to the states and Union Territories under the back-to-back loan facility to meet the shortfall in GST compensation. On July 15, they had credited an amount of Rs 75,000 crore to the states and UTs. “With the current release, the total amount released in the current financial year as back to back loan in-lieu of GST compensation has reached Rs 1,15,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection,” a finance ministry statement said.
For the current fiscal year, central government had said it would borrow Rs 1.59 lakh crore and release it to states and UTs with legislatures on a back-to-back basis to meet the resource gap due to the short release of compensation on account of inadequate amount collected in the Compensation Fund. The Centre added that the balance amount will be released in due course.
“Rs 40,000 cr is funded from borrowings of GoI in 5-year securities, totalling Rs 23,500 crore and 2-year securities for Rs 16,500 crore issued in the current financial year, at a weighted average yield of 5.69 and 4.16% per annum, respectively. No additional market borrowing by the Centre is envisaged on account of this release,” the statement added.