 "Centre approves Rs 56,000 cr for 16 states for capital investment")
Centre on Monday approved Rs. 56,415 crore to 16 States for capital investment under ‘Special Assistance to States for Capital Investment 2023-24’ Scheme for giving timely boost to capital spending by States.
The projects approved are across various sectors including health, education, irrigation, water supply, power, roads, bridges and railways.
Funds for meeting the State share of Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana have also been provided to the States under this scheme to enhance pace of the projects in these sectors.
The highest allocation has been made to Bihar at Rs 9,640 crore followed by Madhya Pradesh which has been given Rs 7,850 crore.
The scheme ‘Special Assistance to States for Capital Investment 2023-24' was announced in the Union Budget 2023-24. The idea was to provide boost to capital spending by States.
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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.
A similar scheme - ‘Special Assistance to States for Capital Investment for 2022-23' was also executed by the Ministry of Finance in the last financial year. Under the scheme, Capital Investment proposals of Rs. 95,147.19 crore were approved and an amount of Rs. 81,195.35 crore was released to the States in the last financial year.
However, such a scheme was first instituted by the Ministry of Finance in 2020-21 in the wake of COVID-19 Pandemic to provide assistance to the states.
The scheme for 2023-24 has eight parts, Part-I being the largest with allocation of Rs. 1 lakh crore. This amount has been allocated amongst States in proportion to their share of central taxes and duties as per the award of the 15th Finance Commission. Other parts of the scheme are either linked to reforms or are for sector specific projects.
In Part–II of the scheme, an amount of Rs. 3,000 crore has been set aside for providing incentives to States for scrapping of State Government vehicles and ambulances, waiver of liabilities on old vehicles, providing tax concessions to individuals for scrapping of old vehicles and setting up of automated vehicle testing facilities. Part–III & IV of the scheme aim at providing incentives to States for reforms in Urban Planning and Urban Finance.
The scheme also aims at increasing the housing stock for the police personnel and their families within the police stations in urban areas. An amount of Rs. 2,000 crore is earmarked for this purpose under Part-V of the scheme.