Centre releases Rs 1.59 lakh crore to states to compensate for GST shortfall

The Centre released the balance of Rs 44,000 crore to states as a loan to compensate for the GST shortfall on Thursday, October 28. 

New Delhi: The Centre on Thursday released the balance of Rs 44,000 crore to states as a loan to compensate for the GST shortfall, taking the total amount to Rs 1.59 lakh crore this fiscal. This release of funds as back-to-back loans is in addition to the bi-monthly GST compensation being given out of cess collection.

The 43rd GST Council meeting on May 28, 2021, had decided that the Centre would borrow Rs 1.59 lakh crore in 2021-22 and release it to states and UTs with the legislature on a back-to-back basis to meet the resource gap due to the shortfall in compensation on account of the inadequate amount collected in the GST compensation fund.

This amount is as per the principles adopted for a similar facility in the last fiscal 2020-21, where Rs 1.10 lakh crore was released to states.