The Finance Ministry released an amount of Rs 40, 000 crore to the states and Union Territories with legislature under the back-to-back loan facility to meet the shortfall in GST compensation. On July 15, an amount of Rs 75, 000 crores was released to the states and UTs with the legislature. With the current release, the total amount released in the current financial year as back-to-back loan in-lieu of GST compensation has reached Rs 1, 15, 000 crores. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection, a Finance Ministry statement said.
The release of Rs 40,000 crore is funded from borrowings of Government of India in 5-year securities, a total of Rs 23, 500 crores and 2-year securities for Rs 16, 500 crore issued in the current financial year, at a weighted average yield of 5.69 and 4.16 percent per annum, respectively. No additional market borrowing by the Centre is envisaged on account of this release.It is expected that this release will help the states/UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.
