Ministry of Finance has released Rs 40,000 crore to the states and UTs with Legislature under the back-to-back loan facility in lieu of GST Compensation to meet the resource gap due to the short release of Compensation on account of inadequate amount in the Compensation Fund.
This is in addition to normal GST compensation being released every 2 months out of actual cess collection, funded from borrowings of Government of India (GoI) in 5-year securities, totalling Rs 23,500 crore and 2-year securities for Rs 16,500 crore issued in the current financial year, at a Weighted Average Yield of 5.69 and 4.16 percent per annum respectively.
The sum total of Rs 2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY 2021-22. Whereas, almost 72 percent of the total shortfall for the entire year has been released with this current single instalment. The balance amount will be released in due course.
Earlier on 15th July, 2021 an amount of Rs 75,000 crore was released to the States & UTs with legislature.
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