The Centre on Thursday released ₹4,122.27 crore to the State as GST (Goods and Services Tax) compensation dues through a special borrowing arrangement.
The announcement came just hours after Finance Minister K. N. Balagopal met Union Finance Minister Nirmala Sitharaman in New Delhi to seek a speedy release of the amount.
The ₹4,122.27 crore is part of ₹75,000 crore released by the Finance Ministry to States and Union Territories on Thursday under a back-to-back loan facility in lieu of GST compensation.
Addressing delay
The money released to Kerala and other States is raised through Centre's borrowings in five- and two-year securities. Following the GST Council meeting in May this year, it was decided that the Centre would borrow ₹1.59 lakh crore and release it on a back-to-back basis to address the delay in compensation payment caused by cash shortage in the GST compensation fund.
Mr. Balagopal, who met Ms. Sitharaman in New Delhi on Thursday, had conveyed Kerala's demand that the GST compensation dues totalling ₹4,500 crore should be released at the earliest, given the strain on the State finances caused by COVID-19.
Chief Minister Pinarayi Vijayan also had brought the matter to the notice of Prime Minister Narendra Modi during a meeting earlier this week.
Mr. Balagopal, talking to reporters in New Delhi after meeting Ms. Sitharaman, said Kerala would continue to press for an extension of the GST compensation period by another five years, given the economic downturn caused by the pandemic. The arrangement where the Centre compensates States for shortfalls in GST revenue would come to an end in the current financial year.₹
Mr. Balagopal demanded a moratorium on repayment of loans, especially by small borrowers, amid financial woes caused by the pandemic.
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