National Affairs

Centre To Borrow ₹1.1 Lakh Crore For GST Compensation: Finance Ministry On Thursday

The central government will borrow ₹1.1 lakh crore under the special window to meet the shortfall of Goods and Services Tax (GST) compensation, the finance ministry informed on Thursday. “Under the Special Window to States for meeting the GST Compensation cess shortfall, the estimated shortfall of ₹1.1 lakh crore (assuming all states join) will be borrowed by Government of India in appropriate tranches,” the finance ministry said. The amount borrowed will be passed on to the states as “back-to-back loan in lieu of GST compensation cess” releases, said the finance ministry. This borrowing will not have any impact on the fiscal deficit of the government. The amount will be reflected as the capital receipts of the state governments and as part of financing of its respective fiscal deficits, said the finance ministry. The total shortfall in collection of GST estimated at ₹2.35 lakh crore. Out of the total shortfall, ₹1.1 lakh crore is on account of GST shortfall.

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