BHUBANESWAR: The Odisha government on Thursday, October 7, 2021, received Rs 1,617.65 crore from the Centre as part of a back-to-back loan facility to meet the shortfall in GST compensation under the Special Borrowing Window. Odisha is among 26 states and union territories which have been released a total of Rs 40,000 crore by the department of expenditure of the Ministry of Finance. The money released is in addition to normal GST compensation provided every two months out of actual cess collection.
The release is funded from borrowings of the Centre in five-year securities totalling Rs 23,500 crore and two-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 cent per annum respectively. The State has received Rs 950.37 crore under the five-year securities and Rs 667.28 crore under the two-year securities.
The Centre has so far released more than 72 per cent of the total estimated shortfall for the entire year under the back-to-back loan facility. Odisha is one of the states which had opted for option 1 of the two choices provided by the Centre for borrowing to meet the GST shortfall caused by Covid-19 pandemic.
As option-I allowed the Centre market borrowing, the State continues to receive compensation since October last. For the second financial year in a row, the Centre has been borrowing under a special, relatively low-cost mechanism to bridge a yawning shortfall in the GST compensation cesspool and transfer the funds as loans sans any consequent fiscal cost to states.
In July, the State had received over Rs 3,033 crore from the Centre as part of back-to-back loans to states to meet the GST shortfall. As per the GST Act, States and Union Territories with the legislature are guaranteed compensation if the GST revenue growth is less than 14 per cent.