States given capital expenditure targets tied to interest-free loans

If target missed, part of loans to be deducted in 2024-25

For the first time ever, the Centre has tied part of the Rs 1.3-trillion capital expenditure (capex) support to states with their capex targets. These capex targets, for the approaching financial year (2023-24, or FY24), have been set by the Centre itself.

If any state fails to meet these capex targets at the end of FY24, then part of the long-term interest-free capex loans given to it by the Centre will be deducted in 2024-25 (FY25), according to the guidelines sent by the Ministry of Finance’s Department of Expenditure to states in February. 

“We had given states provisional capex targets earlier, in