The rest of the five states did not record a GST shortfall. According to the arrangement, the Centre borrows the money from the RBI and transfers it to the states.
NEW DELHI: The Centre on Friday borrowed Rs 6,000 crore and transfered it to 16 states as the first tranche of GST compensation under the special borrowing window announced last week. The Centre has set up the special borrowing window to address the shortfall in GST collections during the fiscal year 2020-2021.
In all, 21 states and 2 Union Territories have opted for borrowing through this special window, which involves back-to-back borrowing coordinated by the Ministry of Finance. The money will be given to 16 out of 21 states who agreed to the first option given by the Centre—to borrow Rs 1.1 lakh crore to meet the shortfall in GST compensation.
The states which will receive the transfer are Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand and two Union Territories including Delhi and Jammu and Kashmir.
The rest of the five states did not record a GST shortfall. According to the arrangement, the Centre borrows the money from the RBI and transfers it to the states. The finance ministry said that the borrowing is at an interest rate of 5.19 per cent and the tenor is expected to be broadly in the range of 3 to 5 years. The borrowed amount, along with the interest, is to be settled from future realisations of the GST compensation cess.
