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Government of India releases balance amount of ₹ 44,000 crore to States and UTs (with Legislature) under the back-to-back loan facility in-lieu of GST compensation

Ministry of Finance Government of India releases balance amount of ₹ 44,000 crore to States and UTs (with Legislature) under the back-to-back loan

Ministry of Finance

Government of India releases balance amount of ₹ 44,000 crore to States and UTs (with Legislature) under the back-to-back loan facility in-lieu of GST compensation

Posted On: 28 OCT 2021 3:57PM by PIB Delhi

The Ministry of Finance has released ₹44,000 crore today to the States and UTs with Legislature under the back-to-back loan facility in lieu of GST Compensation. After taking into account earlier release of ₹ 1,15,000 crore (₹ 75,000 crore released on 15th July, 2021 and ₹ 40,000 crore released on 07th October, 2021), total amount released in the current financial year as back-to-back loan in-lieu of GST compensation is ₹1,59,000 crore. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection.

Subsequent to the 43rd GST Council Meeting held on 28.05.2021, it was decided that the Central Government would borrow ₹1.59 lakh crore and release it to States and UTs with Legislature on a back-to-back basis to meet the resource gap due to the short release of Compensation on account of inadequate amount in the Compensation Fund. This amount is as per the principles adopted for a similar facility in FY 2020-21, where an amount of ₹1.10 lakh crore was released to States under a similar arrangement. This amount of ₹1.59 lakh crore would be over and above the compensation in excess of ₹1 lakh crore (based on cess collection) that is estimated to be released to States/UTs with Legislature during this financial year. The sum total of ₹2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY 2021-22.

All eligible States and UTs (with Legislature) have agreed to the arrangements of funding of the compensation shortfall under the back-to-back loan facility. For effective response and management of COVID-19 pandemic and a step-up in capital expenditure all States and UTs have a very important role to play. For assisting the States/UTs in their endeavour, Ministry of Finance has frontloaded the release of assistance under the back-to-back loan facility during FY 2021-22 of ₹1,59,000 crore.

The release of ₹44,000 crore being made now is funded from borrowings of GoI in 5-year securitiesissued in the current financial year, at a Weighted Average Yield of 5.69%. No additional market borrowing by Central Government is envisaged on account of this release.

It is expected that this release will help the States/UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.

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State/ UTs wise amount released as “Back to Back Loan in lieu of GST Compensation Shortfall” on 28.10.2021

(Rs. in crore)

Sl. No.

Name of the State/ UTs

Amount

1.

Andhra Pradesh

905.59

2.

Assam

490.76

3.

Bihar

1885.69

4.

Chhattisgarh

1374.02

5.

Goa

234.28

6.

Gujarat 

3608.53

7.

Haryana

2045.79

8.

Himachal Pradesh 

745.95

9.

Jharkhand

687.76

10.

Karnataka

5010.90

11.

Kerala   

2418.49

12.

Madhya Pradesh

1940.20

13.

Maharashtra

3814.00

14.

Meghalaya

39.18

15.

Odisha

1779.45

16.

Punjab

3357.48

17.

Rajasthan

2011.42

18.

Tamil Nadu

2240.22

19.

Telangana

1264.78

20.

Tripura

111.34

21.

Uttar Pradesh

2252.37

22.

Uttarakhand

922.30

23.

West Bengal

1778.16

24.

UT of Delhi

1713.34

25.

UT of J&K

1064.44

26.

UT of Puducherry

303.56

Total

44,000.00

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RM/KMN

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