The Central Government on October 23, 2020 borrowed and transferred six thousand crore rupees as first tranche to 16 States and two Union Territories.
- They are Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, Delhi and Jammu and Kashmir.
- The borrowing is at an interest rate of 5.19 percent.
- It is intended to make weekly releases of 6,000 crore rupees to the States.
- Tenor of borrowing is expected to be broadly in the range of 3 to 5 years.
- The Government has evolved a special borrowing window to address the shortfall in the GST collection during the year 2020 – 2021.
- 21 States and two Union Territories opted for this special window involving back-to-back borrowing coordinated by the Ministry of Finance.
- The Union Finance Ministry had announced that the Centre would borrow from the market and then act as an intermediary to arrange back-to-back loans to pay the GST compensation shortfall of Rs 1.1 lakh crore to state governments.
- This arrangement will not reflect in the fiscal deficit of the Centre and will appear as capital receipts for state governments.
