Kerala has received ₹1,269.96 crore as part of the eighth instalment released to the States by the Union Finance Ministry on Monday as back-to-back loan to meet the Goods and Services Tax (GST) compensation shortfall.
Of the total ₹6,000 crore released, ₹5,516.60 crore is for 23 States, including Kerala, and ₹483.40 crore to three Union Territories (UT) with Legislative Assembly — Delhi, Jammu & Kashmir and Puducherry — who are members of the GST Council. The remaining five States do not have a gap in revenue on account of the GST implementation.
The ₹6,000 crore released has been taken as loan through the Special Window of the Reserve Bank of India (RBI) at an interest rate of 4.19%. The Union government had set up a special borrowing window in October 2020 to meet the estimated shortfall of ₹1.10 lakh crore in revenue arising on account of implementation of GST.
For Kerala, this is the fourth instalment of the dues after joining other States and UTs to accept Option I put forward by the Union government for meeting the GST compensation cess shortfall.
On December 7, the State received ₹642.12 crore. Another ₹956.04 crore reached the treasury from the seventh weekly instalment of ₹6,000 crore on December 14. A sum of ₹328.2 crore was received before that.
Permission to borrow
The Centre has already granted additional borrowing permission of ₹4,522 crore to Kerala (0.5% of Kerala’s GSDP), according to the Finance Ministry. A total amount of ₹48,000 crore had been released so far to States and UTs. This is in addition to the additional borrowing permission of ₹1,06,830 crore granted to the States.
