The Narendra Modi government on Wednesday released GST Compensation of Rs 17,000 crore to states. The total amount of compensation released to the states/UTs so far including the aforesaid amount during the year 2021-22 is Rs 60,000 crore.

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As per the decision of GST Council, it has been decided by the central government that it would borrow Rs 1.59 lakh crore in 2021-22 and release it to states and UTs with legislatures on a back-to-back basis to meet the resource gap due to the short release of compensation on account of the inadequate amount collected in the Compensation Fund.

This amount is as per the principles adopted for a similar facility in FY 2020-21, where an amount of Rs 1.10 lakh crore was released to states under a similar arrangement.

This amount of Rs 1.59 lakh crore to be provided to states as back to back loans 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 the legislature during the current 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.

(Edited by : Jomy Jos Pullokaran)