Uttar Pradesh emerged as the largest recipient of the ₹1.3 trillion special assistance to states for capital expenditure in the current fiscal year.
- As of 13 December, of the ₹98,156.9 crore approved under the scheme UP received ₹18,936 crore based on the eligibility criteria, followed by Bihar (₹9,932.25 crore), Madhya Pradesh (₹8,134 crore, and West Bengal (7,523 crore).
- The scheme has twin objectives: to provide growth impetus through public expenditure and nudging states to undertake citizen-centric reforms.
- A few states, such as Kerala and Andhra Pradesh, did not meet the eligibility criteria to avail the benefits.
About the scheme
- The Scheme for Special Assistance to States for Capital Expenditure was launched in FY2020-21.
- The scheme has been expanded and continued as ‘Scheme for Special Assistance to States for Capital Investment 2023-24’ with allocation of ₹1.3-lakh crore.
- Under the scheme, special assistance is being provided to the State Governments in the form of 50-year interest free loan up to an overall sum of Rs. 1.3 lakh crore during the financial year 2023-24.
- This includes an amount of ₹1-lakh crore under Part-I of the Scheme, which has been allocated to States in proportion to their share of Central taxes as per the award of the 15th Finance Commission.
- Another ₹30,000 crore is provided as incentive amounts for reform-centric and sector-specific areas — scrapping old vehicles, urban planning reforms, financing reforms in urban local bodies to make them creditworthy for municipal bonds, housing for police personnel above or as part of police stations, unity malls, children and adolescent’ library and digital infrastructure.
