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The compensation requirement for February-March of a fiscal usually will get rolled over to the following 12 months.
The GST compensation cess collections, back-to-back market loans and a few funds parked within the GST Compensation Fund will probably be sufficient to satisfy the Rs 2.63 lakh crore wanted in FY22 to compensate states for shortfall, but it surely won’t be sufficient to pay Rs 61,000-crore arrears for April-January of FY21, ranking company Icra mentioned.
“For FY22, we estimate the mixed protected revenues of all of the states at Rs 8.72 lakh crore and the state GST (SGST) collections at Rs 6 lakh crore. Accordingly, we estimate the GST compensation requirement for FY22 (April-March) at Rs 2.7 lakh crore. Out of this, the proportionate compensation for the interval April 2021-January 2022 is pegged at Rs 2.26 lakh crore, which is predicted to be disbursed to the state governments in FY22 itself. The steadiness Rs 45,200 crore for February-March 2022 can be rolled over to FY23,” Icra mentioned.
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The compensation requirement for February-March of a fiscal usually will get rolled over to the following 12 months.
Accordingly, a complete payout of Rs 2.63 lakh crore (Rs 36,700 crore for February-March 2021 plus Rs 2.26 lakh crore) would should be launched by the Union authorities to the state governments throughout FY22 for the 12 months from February 2021-January 2022, it mentioned.
The opening steadiness of Rs 4,700 crore within the GST Compensation Fund, the projected cess assortment of Rs 1 lakh crore for FY22 and the back-to-back market borrowing of Rs 1.58 lakh crore, introduced just lately by the Union authorities, would offer Rs 2.63 lakh crore to the Centre to launch as GST compensation to the state governments within the present fiscal, it mentioned.
“That is ample to cowl the GST compensation for the interval February 2021-January 2022. Nevertheless, the out there funds won’t cowl the sizeable spillover of Rs 61,000 crore pertaining to the interval April 2020-January 2021, the financing choices for which stay unclear,” Icra mentioned.
Icra has estimated the quantity of compensation associated to the interval April 2020-January 2021 at Rs 2.41 lakh crore, towards which the Union authorities has launched Rs 1.8 lakh crore to the state governments in FY21 by way of back-to-back loans and the inflows of GST compensation cess. Accordingly, it estimates {that a} compensation of Rs 61,000 crore pertaining to the interval April 2020-January 2021, is pending. Furthermore, the compensation for February-March 2021 is estimated by the ranking company at Rs 36,700 crore, which is predicted to be launched in FY22.
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