Why in the news?
- The Department of Expenditure, Ministry of Finance on April 1, 2021 said that it has released an amount of Rs. 11,830 crore to States under the scheme “Special Assistance to States for Capital Expenditure”.
What is Special Assistance to States for Capital Expenditure?
- The scheme of “Special Assistance to States for Capital Expenditure was announced by the Finance Minister on 12th October, 2020 as part of Aatma Nirbhar Bharat package.
- The Scheme is aimed at boosting capital expenditure by the State Governments who were facing difficult financial environment in the year 2020-21 due to a shortfall in tax revenue arising from the COVID-19 pandemic.
The scheme has three parts:
- Part–I of the scheme covers the north-eastern and hill States. Rs.2500 crore were allocated under this part to the 9 North East and Hill States under this part.
- Part-II of the scheme is, for all other States not included in Part-I. An amount of Rs.7,500 crore was 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 crore was earmarked. This amount was available 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. The reforms were to be certified by the nodal ministry concerned. The 4 reforms are – One Nation One Ration Card, Ease of doing Business Reform, Urban Local Body/ Utility Reform and Power Sector Reform. 11 States qualified under this part and were given enhanced allocation under Part-III of the scheme.
