GST compensation dues: Finance Ministry releases Rs 6,000 crore as second tranche to 16 states and 3 UTs

The Finance Ministry on November 2 released Rs 6,000 crore as the second tranche to 16 States and three Union territories under its special window to states for meeting the GST compensation cess shortfall, it said in a statement.

"This amount was raised at a weighted average yield of 4.42 per cent. This amount will be passed on to the states/UTs at the same interest rate, which is lower than the cost of borrowings for the states and UTs, thus benefitting them," the ministry said in its press release.

Twenty one states and three Union territories have opted for the borrowing option, and the Centre has facilitated loans of Rs 12,000 crore till date.

Still looking to work with opposition-ruled states on GST compensation issue: Centre.

The states/UTs, which have opted for the Special Window under Option I are: Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, UT of Delhi, UT of Jammu and Kashmir, and UT of Puducherry.

However, opposition-ruled states have still not agreed to the borrowing option, under which states have been given the choice of borrowing Rs 1.1 lakh crore, the principal and interest of which will be paid from the Compensation Cess Fund from 2022 onwards. The balance amount will also be given to states after that year.

Finance Minister Nirmala Sitharaman has written to the Chief Ministers of those (opposition-ruled) states and requested them to join the scheme (option one of compensation shortfall scheme), confirmed Finance Secretary Ajay Bhushan Pandey to MoneyControl.