The central government has released Rs 86,912 crore to state governments, clearing all the Goods and Services Tax (GST) compensation due to them.
"This decision was taken to assist the States in managing their resources and ensuring that their programmes especially the expenditure on capital are carried out successfully during the financial year," the Centre said in a statement on May 31.
The Centre made the full payment despite only about Rs 25,000 crore being available in the GST compensation fund. The balance money has been paid from the Centre's own resources pending collection of cess.
Of the Rs 86,912 crore released to states, Rs 47,617 crore worth of compensation was due up to January, Rs 21,322 crore was due for February-March, and Rs 17,973 crore was due for April-May.