GST revenue shortfall: Centre may have to borrow Rs 1.58 trillion

Shortfall estimated at Rs 2.7 trn; Rs 1.1 trn may be met via cess collection

The Union government has proposed market borrowing of Rs 1.58 trillion in the current fiscal year (FY22) to compensate states for the goods and services tax (GST) revenue shortfall in view of inadequate cess collection this year. This will be the second straight year of additional borrowing as the Covid-19 pandemic extends into 2021. The Centre has pegged the GST compensation requirement at Rs 2.7 trillion for FY22, of which Rs 1.1 trillion is expected to be met through cess collection. Like last year, a revenue growth of 7 per cent has been assumed to forecast the shortfall and borrowing