Centre to borrow Rs 1.1 trn to meet states' shortfall in GST compensation

The amount so borrowed will be passed on to the States as a back-to-back loan in lieu of GST Compensation Cess releases

The central government will borrow Rs 1.1 trillion to meet the shortfall in GST compensation to be paid to states using a special window that "will not have any impact on the fiscal deficit".

The amount so borrowed would be passed on to states as back-to-back loans in lieu of the GST compensation cess releases, said the finance ministry on Thursday. "The amounts will be reflected as capital receipts of the state governments and as part of financing of their respective fiscal deficits."

"It may also be clarified that the General Government (States+Centre) borrowings will not increase by this