SPECIAL ASSISTANCE TO STATES FOR CAPITAL EXPENDITURE

Till December 12, 2020, all the States except Tamil Nadu have availed benefits of the newly announced scheme for “Special Assistance to States for Capital Expenditure”.

Special Assistance to States for Capital Expenditure

  • The scheme was announced by the Finance Minister on October 12, 2020 as a part of the AatmaNirbhar Bharat package.
  • The capital expenditure projects have been approved in diverse sectors like, health, rural development, water supply, irrigation, power, transport, education, urban development.

The Scheme has three parts:

  • The Scheme has three parts. Part –I of the scheme covers the north-eastern region. Under this part, Rs.200 crores is allocated to 7 north-eastern States (Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura). In view of higher population and geographical area, Assam has been allocated Rs.450 crores under the scheme.
  • Part-II of the Scheme is, for all other States not included in Part-I.An amount of Rs.7,500 crores is earmarked for this part. This amount has been allocated amongst these States in proportion to their share of central tax as per the interim award of the 15th Finance Commission for the year 2020-21.
  • Part-III of the Scheme is aimed at pushing various citizen-centric reforms in the States. Under this Part, an amount of Rs.2000 crores is earmarked. This amount will be available only to those States who carry out at least 3 out of the 4 reforms specified by the Ministry of Finance in its letter dated 17th May, 2020 regarding reform linked additional borrowing permissions. The 4 reforms are – One Nation One Ration Card, Ease of doing Business Reform, Urban Local Body/ Utility Reform and Power Sector Reform.

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