BENGALURU: The Union Finance Ministry on Thursday said it had released Rs 75,000 crore to states under the ‘back-to-back loan facility’ in lieu of GST compensation. The loan facility is expected to compensate for losses in GST collections due to revenue shortages arising out of the Covid-19 pandemic and its impact on the economy.
Karnataka has received Rs 8,542.17 crore as first instalment. The funds released on Thursday is in addition to regular GST compensation being released every two months out of actual cess collection to states. As per the decision taken in the 43rd GST Council meeting held in May, the Union Government will borrow Rs 1.59 lakh crore and release it to states and UTs with legislature on a back-to-back basis.
The same principles that were applied to similar loans last fiscal year will be applied this year as well. The first installment is nearly 50 per cent of the total shortfall of compensation for the year. “The balance amount will be released in the second half of 2021-22 in steady instalments,” a statement from the Finance Ministry said. Karnataka has been assured of Rs 18,000 crore this fiscal year as part of back-to-back loans apart from the regular compensation from actual cess collection.
