The Central Government has released the 11th installment of GST compensation to states and union territories.
The Ministry of Finance said that 6,000 crores of rupees are being released to the States and UTs every week. So far, the Central Government has released Rs 66,000 crore under this head. The Center is releasing these funds to make up for the GST Compensation after the GST is implemented.
- January 11, 2021, 10:13 PM IST
Three union territories got a total of Rs 483 crore
The Finance Ministry said that in the 11th installment of Rs 6,000 crore, Rs 5,516.60 crore has been released to 23 states. At the same time, Rs 483.40 crore has been released to the Union Territories of Delhi, Jammu and Kashmir and Puducherry. Apart from this, the implementation of GST in Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim has not reduced their revenue. Therefore, no payment has been made to them as compensation. This week, the Center has taken a loan at an interest rate of 5.10 per cent. So far, the central government has taken a loan of Rs 66,000 crore under this facility at an average interest of 4.72 per cent.
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The central government has released installments to the states on October 23, 2020, November 2, November 9, November 23, December 1, December 7, December 14, December 21, December 28, 2020, January 4, 2021 and January 11. The Finance Ministry had said that it would release Rs 6,000 crore to the states every week. This system will not affect the fiscal deficit of the Center and will be seen as a capital gain of the state governments. The Finance Ministry had said in October 2020 that the Center would take loans in installments from the market to compensate the states for the reduction of Rs 1.1 lakh crore in GST collection.
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The central government gave two options for GST compensation
The Center gave all the states two options in August 2020 regarding GST compensation. Under the first option, the states can take a loan of Rs 97,000 crore from the special window of the Reserve Bank of India (RBI) or take a total of Rs 2.35 lakh crore from the market to meet the revenue deficit due to GST implementation. The central government has now revised this amount to Rs 1.10 lakh crore from the special window and Rs 1.8 lakh crore from the market.