The Government of India has sanctioned Rs 60,000 crore of long-term capital expenditure funds to states this fiscal under the Scheme Special Assistance to States for Capital Investment for 2022-23.
Key points
- Under this Scheme, financial assistance is provided to the States Governments in the form of 50-year interest free loan for capital investment projects, making a strong beginning to the scheme announced earlier this year to build roads, ports, bridges, airports, and highways across the country.
- The scheme envisages giving Rs 1 trillion of 50-year interest free loans to states, over and above the normal borrowing they are allowed.
- The aim is to ensure that local administrations get more financial resources for building productive assets, which will also add jobs. Uttar Pradesh, West Bengal, Madhya Pradesh, and Bihar have emerged as the biggest gainers from the infrastructure financing.
- So far, the government has sanctioned Rs 60,000 crore under the scheme, of which Rs 30,000 crore has already been released.
- The scheme entails Rs 80,000 crore to be given based on the Fifteenth Finance Commission (FFC) formula and and the release of the balance Rs 20,000 crore is linked to infrastructure connectivity projects such as the laying of optical fibre cables for last-mile connectivity under BharatNet in rural areas, the state component of the PM Gram Sadak Yojana, projects under the GatiShakti master plan and urban sector reforms.
