Finance Ministry releases 8th weekly instalment of Rs 6,000 crore to States to meet GST compensation shortfall

Finance Ministry has released the 8th weekly instalment of Rs 6 thousand crore to the States to meet the GST compensation shortfall. Out of this, an amount of Rs 5,516 crore has been released to 23 States and Rs 483 crore has been released to the 3 Union Territories with Legislative Assembly, Delhi, Jammu and Kashmir and Puducherry who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The Government of India had set up a special borrowing window in October this year to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the Government of India on behalf of the States and UTs. The borrowings have been done in 7 rounds.

The amount released this week was the 8th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.19 per cent. So far, an amount of Rs 48 thousand crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.69 per cent.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation,Central Government has also granted additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product, GSDP to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. 

All the States have been given their preference for Option-I. Permission for borrowing the entire additional amount of Rs 1,06,830 crore has been granted to 28 States under this provision.


The Dispatch is present across a number of social media platforms. Subscribe to our YouTube channel for exciting videos; join us on Facebook, Intagram and Twitter for quick updates and discussions. We are also available on the Telegram. Follow us on Pinterest for thousands of pictures and graphics. We care to respond to text messages on WhatsApp at 8082480136 [No calls accepted]. To contribute an article or pitch a story idea, write to us at [email protected] |Click to know more about The Dispatch, our standards and policies