Govt releases Rs 86,912 cr to states, clears entire GST compensation dues

To meet the shortfall in GST compensation to states, the Centre said that it borrowed Rs 1.59 trillion in FY22 and Rs 1.1 trillion in FY21 from the market and passed them on to the states

Ahead of the compensation regime for goods and services tax (GST) that ends in June, the Centre has released the entire compensation of Rs 86,912 crore due to states.

This step was taken to help states in managing their resources. It was also to ensure that their programmes — especially expenditure on capital —  were carried out successfully during the fiscal year, the finance ministry stated on Tuesday.  The full compensation was made even when the cess fund had an inadequate balance of just Rs 25,000 crore.

Compensation to states will be paid out of the compensation fund since the inception of