GST Compensation: Centre Releases Rs 6,000 Cr As Second Tranche To 16 States, 3 UTs Under Special Borrowing Window

The Ministry of Finance said it will be releasing an amount of Rs 6000 crore as second tranche to 16 States and 3 Union Territories today under its "Special Window to States"

Finance Minister Nirmala Sitharaman. (File Photo/ AFP)

To meet the Goods and Services Tax (GST) Compensation Cess shortfall, the central government has announced to release Rs 6000 crore as second tranche to 16 States and 3 Union Territories. In an official statement issued on Monday, the Ministry of Finance said it will be releasing an amount of Rs 6000 crore as second tranche to 16 States and 3 Union Territories today under its "Special Window to States". "This amount was raised at a weighted average yield of 4.42 per cent, and will be passed on to the States/UTs at the same interest rate, which is lower than the cost of borrowings for the States and UTs, thus benefitting them," the Finance Ministry said, adding that it has facilitated loans of Rs 12,000 crore till date under the Special Window to States/UTs. 21 States and 3 Union Territories till date, have opted for the Special Window under Option I. The loans raised by GoI are released on a back-to-back basis to States/UTs, in lieu of GST Compensation Cess releases. The loans have been released to the following States and Union Territories - Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, UT of Delhi, UT of Jammu and Kashmir and UT of Puducherry. Last month, the central government had transferred Rs 6,000 crore as the first tranche to 16 states and two union territories under special borrowing window on October 23. The Finance Ministry had fixed the interest rate at 5.19 per cent, with the tenor of borrowing broadly in the range of  3 to 5 years.