Centre releases Rs 1,264 crores to Telangana
Hyderabad: The Central government on Thursday released Rs.1,264.78 crores to Telangana as back-to-back loan in lieu of GST compensation shortfall. The Centre has released the balance amount of Rs.44,000 crore to the States and Union Territories under the back-to-back loan facility in-lieu of GST compensation. The total amount released in the current financial year in […]
Hyderabad: The Central government on Thursday released Rs.1,264.78 crores to Telangana as back-to-back loan in lieu of GST compensation shortfall.
The Centre has released the balance amount of Rs.44,000 crore to the States and Union Territories under the back-to-back loan facility in-lieu of GST compensation.
The total amount released in the current financial year in lieu of GST compensation was Rs.1.59 lakh crore.
Last month, the State government has sought immediate release of pending amount of Rs 1,383 crore from the Centre. Finance Minister T Harish Rao also submitted a representation to Union Finance Minister Nirmala Sitharaman to this effect, ahead of the GST Council meeting held at Lucknow last month.
He requested her to ensure release of the amount at the earliest as the new State was strapped for funds.
The release of Rs.1.59 lakh crore was in addition to normal GST compensation being released every two months’ out of actual cess collection, according to a press release.
Subsequent to the 43rd GST council meeting held on May 28, 2021, it was decided that the Central government would borrow Rs.1.59 lakh crore and release it to States and UTs with legislature on a back-to-back basis to meet the resource gap due to the short release of compensation on account of inadequate amount in the compensation fund.
This amount is as per the principles adopted for a similar facility in financial year 2020-21, where an amount of Rs.1.10 lakh crore was released to States under a similar arrangement. This amount of Rs.1.59 lakh crore would be over and above the compensation in excess of Rs.1 lakh crore (based on cess collection) that is estimated to be released to States and UTs with legislature during this financial year.
The sum total of Rs.2.59 lakh crore is expected to exceed the amount of GST compensation accruing in financial year 2021-22. All eligible States and UTs with legislature have agreed to the arrangements of funding of compensation shortfall under the back-to-back loan facility.
For effective response and management of Covid-19 pandemic and a step-up in capital expenditure all States and UTs have a very important role to play. For assisting the States and UTs in their endeavour, the Ministry of Finance has frontloaded the release of assistance under the back-to-back loan facility during financial year 2021-22 of Rs.1.59 lakh crore.
The press release said that it was expected that the amount will help the States and UTs in planning their public expenditure among other things, for improving, health infrastructure and taking up infrastructure projects.
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