Kerala gets ₹575 crore for GST shortfall

Kerala has got ₹575 crore from the ₹5,000 crore released by the Ministry of Finance, Department of Expenditure to the States and Union Territories, on Saturday to meet the Goods and Service Tax (GST) compensation shortfall.

The money has reached the State exchequer as the 17th instalment within a week after the State got ₹252 crore from the 16th instalment that was released.

A total amount of ₹4,730.41 crore has been released to 23 States and balance to three UT’s with Legislative Assembly—Delhi, Jammu and Kashmir, and Puducherry—who are members of the GST Council. As much as 91% of the total estimated GST compensation shortfall has been released by the Centre.

The amount released has been borrowed at an interest rate of 5.59%. So far, an amount of ₹1,00,000 crore has been borrowed by the Centre through the special borrowing window at an average interest rate of 4.83%.

Additional borrowing permission equivalent to 0.50% of Gross States Domestic Product has been given to the States choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The special borrowing window was set up in October 2020 to meet the estimated shortfall of ₹1.10-lakh crore in revenue arising on account of implementation of GST. Kerala has been given the permission of additional borrowing of ₹4,522 crore and has so far raised ₹4,304 crore through the special window till now.

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