NEW DELHI: The Ministry of Finance on Monday approved capital investment of Rs 56,415 to 16 states under the “Special Assistance to States for Capital Investment 2023-24,” scheme for the current financial year.
The capital will be used across sectors including roads, bridges, highways, health, education, irrigation, water, supply and power etc, the ministry said in a statement.
Among the states, Bihar has received the maximum chunk of the total amount at Rs 9,640 crore, followed by Madhya Pradesh at Rs 7,850 crore, West Bengal at Rs 7,523 crore and Rajasthan at Rs 6,026 crore. Funds for meeting the state share of the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana have also been provided to the states under this scheme.
In order to provide a boost to capital spending by states, the government announced the above-mentioned scheme in the Budget 2023-24 through which the Centre is providing 50-year interest-free loans up to Rs 1.3 lakh crore during FY24. The scheme has eight parts, Part 1 being the largest with the highest allocation of Rs 1 lakh crore.
This amount has been allocated among states in proportion to their share of central taxes & duties as the award of the 15th Finance Commission. Other parts of the scheme are either linked to the reforms or are of the specific sectors. A similar scheme named ‘Special Assistance to States for Capital Investment for 2022-23’ was also executed by the ministry 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.
“The scheme for financial assistance to States for capital investment/expenditure, first instituted by the Ministry of Finance in 2020-21 in the wake of the COVID-19 Pandemic have given a very timely boost to capital spending by states.”