Centre transfers Rs 6,000 crore to 16 states, 2 UTs

The Centre borrowed and transferred Rs 6,000 crore to 16 states and two Union territories on the first day, the government said.

The central government on Friday started the process of releasing funds every week to states, which opted to bridge their GST revenue gap with debt, by borrowing money under a special RBI window.

The Centre agreed to borrow under the special RBI window to help diffuse the tension between New Delhi and the dissenting states. (PTI (Representative Image))

The Centre borrowed and transferred Rs 6,000 crore to 16 states and two Union territories on the first day, the government said. The move is part of a ‘back-to-back loan facility’ to states in lieu of GST compensation. The initiative puts pressure on dissenting states such as Kerala, West Bengal and Punjab, which are still weighing their options on whether to accept the scheme or not.

If all states agree, the Centre will borrow Rs 1.1 lakh crore, the estimated revenue shortfall of states for this year due to GST implementation. The Centre agreed to borrow under the special RBI window to help diffuse the tension between New Delhi and the dissenting states.