The Centre had in May last year enhanced the borrowing limit of the states by 2 per cent of their GSDP and half of this special dispensation was linked to undertaking citizen-centric reforms.
Finance Ministry releases weekly instalment of Rs 6,000 cr to states to meet GST compensation shortfall
The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax.
Sources said that the RBI has raised some issues with regard to calculation of an effective capital infusion made in any bank through this instrument issued at par.
To save interest burden and ease the fiscal pressure, the government has decided to issue zero-coupon bonds for meeting the capital needs of the banks.
Downside risks, however, remain due to the spread of a new variant from the UK and fatigue from social distancing guidelines, the Ministry noted.
The gross GST revenue collected in December 2020 was Rs 1,15,174 crore, the highest since the introduction of Goods and Services Tax from July 1, 2017.
The company needs money to pay its employees who are opting for VRS and due to its weak financial conditions, MMTC is unable to pay the due amount.
The RBI’s stance is evident in its report on banking trends in India for FY20 published recently, hinting at more money required for bank recapitalisation.
Public debt accounted for 91.1 per cent of total outstanding liabilities at end-September 2020, as per the latest quarterly report on public debt management.
The government had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST.
The first 0.5 per cent can be borrowed without any condition, while next 0.5 per cent would have to be made through the options offered by the Centre to meet the GST compensation shortfall.
Top officials said the proposal is still being studied though both bankers and industry chambers are lobbying for it.
The ease of doing business is an important indicator of the investment friendly business climate in the country.
Finance Ministry mandarins working on the coming year’s budget want to spend big on infrastructure, healthcare, defence, and incentives for industry.
The Finance Ministry has notified new norms for GST registration in a bid to check the menace of fake invoices.