Center allocates Rs 75,000 crore to Gujarat through advance loan of Rs 6,151 crore, back-to-back loans for loss of GST compensation

Analysis: Center allocates Rs 75,000 crore to Gujarat through advance loan of Rs 6,151 crore, back-to-back loans for loss of GST compensation





5618 crore was allotted to Gujarat for 5 years and 533 crore for 2 years
This loan for 5 and 2 years releases 50% of 1 year amount in one week
The highest advance loan to Karnataka, Maharashtra second, Gujarat third



The Ministry of Finance has provided back-to-back lending facility of Rs. 75,000 crore has been provided. This amount is in addition to the normal payment of GST compensation paid per month from the aggregate of total actual cess. Gujarat gets Rs. 6151 crore has been allocated, out of which Rs. 5618 crore for 5 years advance loan, while Rs. 533 crore has been allotted for two years security, the remaining amount will be paid in the second half of 2021-22.

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At a recent council meeting, it was submitted by the state finance ministers that the states were having difficulty in meeting their expenses due to low GST revenue, which led the central government to take loans from the RBI and allocate loans to those states as needed. Loans given to states will be recovered from future GST revenue. Rs. 68,500 crore on a five-year loan and Rs. 6,500 crore has been paid to the state government for two years of security. On the one hand, the state government has said that the revenue from SGST has increased and on the other hand, Rs. 6,000 crore debt.

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According to the central government's list, 50 per cent of the total amount for one year has been released in a single installment. The GST Council met on May 28 and decided that the central government should spend Rs. It will borrow Rs 1.59 lakh crore and provide it to the states on a back-to-back basis. This amount is based on the amount of cess collected. 1 lakh crore will be excluded. This arrangement has been made to meet the shortfall in the payment of compensation due to insufficient amount in the GST Compensation Fund. Even in 2020-21, Rs. 1.10 lakh crore was distributed in this manner. The balance will be released periodically in the second half of the year.

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Rs. This amount of Rs. 1.59 lakh crore will be in addition to the compensation of Rs. States and Union Territories (with legislatures) have agreed to this arrangement for funding deficit compensation under the back-to-back lending facility. Rs. 75,000 crore is now being funded from Government of India debt in 5 years of securities, with a total of Rs. 68,500 crore and Rs. Security of Rs 6,500 crore has been issued.

Read in Gujarati news 

The highest advance loan to Karnataka with Rs 8542 crore

State	Advance loan	For 5 years	For 2 years
Karnataka	Rs. 8542 crore	Rs. 7801 crore	Rs. 740 crores
Maharashtra	Rs. 6501 crore	Rs. 5937 crore	Rs. 563 crore
Gujarat	Rs. 6151 crore	Rs. 5618 crore	Rs. 533 crore
Punjab	Rs. 5722 crore	Rs. 5226 crore	Rs. 495 crore
Kerala	Rs. 4122 crore	Rs. 3765 crore	Rs. 357 crores
Uttar Pradesh	Rs. 3839 crore	Rs. 3506 crore	Rs. 332 crores
Tamil Nadu	Rs. 3818 crore	Rs. 3487 crore	Rs. 330 crore
Haryana	Rs. 3487 crore	Rs. 3185 crore	Rs. 302 crore
Rajasthan	Rs. 3428 crore	Rs. 3131 crore	Rs. 297 crore
W. Bengal	Rs. 3030 crore	Rs. 2768 crore	Rs. 262 crores
Madhya Pradesh	Rs. 3307 crore	Rs. 3020 crore	Rs. 286 crore

This is an advance loan, the state governments are completely bound against the central government

GST in this regard. The CAA, which is knowledgeable about the matter, said on condition of anonymity that this is a matter of drinking ghee with debt. The central government is taking loans and giving advance loans to the states. GST The government admits that there is no money in the compensation fund. The states have been given back-to-back loans for a period of 5 and 2 years. The central government will now pay only half of the compensation to the states. The central government will also issue bonds to the states in this regard.