Centre releases ₹50,571 cr to states as capex loans during Apr-Nov: MoS finance
- As many as 23 of the 28 states, excluding Arunachal Pradesh, Haryana, Kerala, Punjab and Telangana, availed the interest-free facility provided by the Union government during the ongoing fiscal.
The Union government has released ₹50,571.42 crore to states as part of its ‘special assistance for capital investment’ scheme to be used for ramping up capital expenditure during the first eight months of the ongoing fiscal (FY25), according to the latest data from the finance ministry.
Responding to a question from Member of Parliament (MP) Dilip Saikia in the Lok Sabha, Pankaj Chaudhuri, the minister of state at the finance ministry said as many as 23 of the 28 states, excluding Arunachal Pradesh, Haryana, Kerala, Punjab and Telangana, availed the interest-free facility provided by the Union government during the ongoing fiscal.
Among the states, the highest recipients of the facility were Uttar Pradesh ( ₹7,007.93 crore), Madhya Pradesh ( ₹5,074.94 crore), Bihar ( ₹5,408.88 crore), Rajasthan ( ₹4,552.01 crore), West Bengal ( ₹4,416.23 crore), Assam ( ₹3,181.97 crore), Odisha ( ₹3,085.44 crore), Maharashtra ( ₹2,617.70 crore), Andhra Pradesh ( ₹2,616.27 crore), and Karnataka ( ₹2,272.87 crore).
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In July, during her budget speech, finance minister Nirmala Sitharaman said the allocations for the Centre's ‘special assistance for capital investment’ scheme for states will stand at ₹1.5 trillion for FY25, up from ₹1.3 trillion targeted in the interim budget.
To be sure, of this amount, a chunk of about ₹88,000 crore, or 58%, is linked to “outcomes and reforms” by states.
Reforms states were required to meet to claim a portion of the interest-free loans earlier included those in the housing sector, incentives for scrapping old government vehicles and ambulances, reforms in urban planning and urban finance, housing for police personnel, and setting up libraries with digital infrastructure at panchayat and ward levels for children and young adults.
For loans not linked to specific reforms, one criterion that is followed is that they would be given for projects that are set to be completed within the fiscal year.
Special assistance to states
The ‘special assistance to states for capital investment’ scheme was launched in FY21 to help states after the pandemic with an allocation of ₹12,000 crore.
The Centre stepped up the allocation to the scheme to ₹15,000 crore in FY22 and dramatically scaled that up to ₹1.07 trillion in FY23 with ₹27,000 crore linked to specific reforms by states.
In FY24, ₹1.3 trillion was earmarked for the scheme, and about ₹30,000 crore of that allocation was marked as outcome-based.
The remaining ₹1 trillion had the same condition as proposed for FY25—states had to ensure that the loan was used to supplement their capex and not to substitute it.
According to data from the finance ministry, 26 of 28 states availed as much as ₹109,554.32 crore under the scheme in FY24, while all 28 states together availed ₹81,195.35 crore from the Centre in FY23.
During FY21 and FY22, states availed as much as ₹11,830.29 crore, and ₹14,185.78 crore under the central scheme, according to official data.
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Business NewsEconomyCentre releases ₹50,571 cr to states as capex loans during Apr-Nov: MoS finance
First Published:2 Dec 2024, 07:30 PM IST
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