Centre Announces 50 Year Interest Free Loans Of Rs 12,000 Crore To States For Capital Expenditure

Centre Announces 50 Year Interest Free Loans Of Rs 12,000 Crore To States For Capital ExpenditurePrime Minister Narendra Modi with Finance Minister Nirmala Sitharaman.

The Central government on Monday (12 October) announced 50 year interest free loans for states to the tune of Rs 12,000 crore as special assistance for capital expenditure.

Out of this amount Rs 2,500 crore has been earmarked for Uttarakhand, Himachal Pradesh and Northeastern states. Rs 7,500 crore will be distributed to the other states in proportion of their share in the Finance Commission devolution.

50 per cent of the funds will be released initially and the rest will be released after the first instalment is utilised. States which have met at least three out of four reforms under the Atma Nirbhar fiscal deficit package will receive the rest Rs 2,000 crore.

These funds can be utilised for new or ongoing capital projects or for the settling of contractor or supplier bills. The loan repayment period will begin after 50 years and no loan servicing is required until that time.