E-Paper
States’ GST shortfall rises to ₹2.4 trillion in April-Nov period
Of this, the Centre has given ₹40,000 crore by way of compensation for the April-May period from GST cess collections and has facilitated loans worth ₹84,000 crore under a special borrowing window, minister of state for finance Anurag Singh Thakur informed Rajya Sabha on Tuesday.
State governments’ Goods and Services Tax (GST) revenue shortfall in the April-November period of the current fiscal that is met in part by the Centre and in part by borrowing, has scaled ₹2.46 trillion, official data showed.
Of this, the Centre has given ₹40,000 crore by way of compensation for the April-May period from GST cess collections and has facilitated loans worth ₹84,000 crore under a special borrowing window, minister of state for finance Anurag Singh Thakur informed Rajya Sabha on Tuesday.
This suggests that the GST revenue gap of states this fiscal could breach the earlier estimate of about ₹2.35 trillion for the whole year. The minister informed that GST compensation fund was not adequate to meet the entire compensation requirement as tax collections as well as receipts from the cess were lower.
Large state economies such as Delhi, Maharashtra, Gujarat, Karnataka, Uttar Pradesh and Tamil Nadu have taken a big revenue hit due to the pandemic induced economic recession and have managed to partly bridge the gap with the special borrowing programme. The Central government will raise a total of ₹1.1 trillion and pass it on to states this fiscal to help them meet part of the revenue gap.
States have also been allowed higher borrowing limits—5% of gross state domestic product (GSDP) as part of the government’s economic response to the pandemic, compared to 3% earlier.
Maharashtra’s pending GST compensation, partly met by borrowing, stood at ₹31,892 crore in the April-November period, the highest among all states. In the case of Gujarat, this is over ₹17,000 crores and ₹19,500 crore in the case of Karnataka. Tamil Nadu and Uttar Pradesh are bridging part of their over ₹15,000 crore revenue gap each by way of borrowing.
The centre is facilitating states to meet only a part of their pending GST compensation by way of assisted borrowing. This represents the revenue shortfall arising from the 2017 indirect tax reform and does not include the revenue lost due to the pandemic.
