States
Centre Approves Interest-Free Capex Loans Of Rs 56,415 Crore To Sixteen States Under 'Special Assistance' Scheme
Ankit Saxena
Jun 27, 2023, 01:27 PM | Updated 01:27 PM IST
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An official release has stated that the Centre has approved interest-free and long-term capital expenditure loans of Rs 56,415 crore to 16 states for the year 2023-24.
The scheme, named 'Special Assistance to States for Capital Investment 2023-24', aims to provide timely support to state governments' capital spending.
Bihar has been allocated the highest amount of Rs 9,640 crore, followed by Madhya Pradesh with Rs 7,850 crore, West Bengal with Rs 7,523 crore, Rajasthan with Rs 6,026 crore, and Odisha with Rs 4,528 crore, reports MoneyControl.
The Finance Ministry's release has stated that the scheme has approved capital investment projects in various sectors — including health, education, irrigation, water supply, power, roads, bridges, and railways.
The states have also been provided with funds to meet the state share of Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana to accelerate the pace of projects in these sectors.
The Centre announced its plan to provide state governments with an overall sum of Rs 1.3 lakh crore in the form of 50-year interest-free capex loans in FY24, as stated in the Union Budget 2023-24.
In the previous financial year, states received Rs 81,195 crore.
The scheme comprises eight parts, with the first being the largest, with an allocation of Rs 1 lakh crore.
This amount will be distributed among states in proportion to their share of central taxes and duties, as per the 15th Finance Commission's award.
The other parts of the scheme are either linked to reforms or are for sector-specific projects.
The second part of the scheme has set aside Rs 3,000 crore to provide incentives to states for scrapping old state government vehicles and ambulances, waiving liabilities on old vehicles, providing tax concessions to individuals for scrapping old vehicles, and setting up automated vehicle testing facilities.
The third and fourth parts of the scheme aim to provide incentives to states for reforms in urban planning and urban finance.
An amount of Rs 15,000 crore is earmarked for urban planning reforms, while an additional Rs 5,000 crore is for incentivising states to make urban local bodies creditworthy and improve their finances.
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