Odisha receives a 3,000 CR loan
Odisha receives a 3,000 CR loan
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Bhubaneswar: The Odisha government has got a Rs.3033.10 crore Back to Back Loan in lieu of GST Compensation.
While the Union Government has released Rs. 75,000 crore to all States and Union Territories with legislatures, the State Government has received Rs. 2770.23 crore and Rs. 262.87 crore on July 15, 2021, in two separate breaks.
The total Back to Back Loan in lieu of GST Compensation for FY 2020-21 was Rs.3822.00 crore.
The gap in GST compensation due to states in the current fiscal year is anticipated to be Rs 2.59 lakh crore, of which around Rs 1.59 lakh crore will have to be borrowed this year.
The Centre plans to collect over Rs 1 lakh crore in luxury, demerit, and sin products cess, which will be distributed to states to make up for the income shortfall caused by the GST implementation.
As a result, the remaining Rs 1.59 lakh crore will have to be borrowed in order to satisfy the guaranteed compensation to states under the GST regime.
According to the Ministry, at the GST Council meeting on May 28, it was decided that the central government would borrow Rs 1.59 lakh crore and release it to states and UTs with the legislature on a back-to-back basis to bridge the resource gap caused by the short release of compensation due to an insufficient compensation fund.
“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/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 FY 2021-22,” the Ministry said.
All eligible states and UTs (with the legislature) have agreed to the arrangements for the funding of the compensation shortfall under the back-to-back loan facility, the Ministry said.
“For effective response and management of Covid Pandemic and a step-up in capital expenditure, all States and UTs have a very important role to play. For assisting the States/UTs in their endeavour, Ministry of Finance has front-loaded the release of assistance under the back-to-back loan facility during FY 2021-22 Rs 75,000 crore (almost 50 percent of the total shortfall for the entire year) released today in a single installment. The balance amount will be released in the second half of 2021-22 in steady installments,” it added.
