- The highest amount of assistance totalling Rs 9,640 crore will be given to Bihar
- Tamil Nadu to get Rs 4,079 crore while Gujarat will get Rs 3,478 crore
- The lowest allocation will go to Goa at Rs 386 crore
NE BUSINESS BUREAU
NEW DELHI, JUNE 26
The Centre on Monday approved Rs 56,415 crore to 16 states for various capital investment proposals under “Special Assistance to Capital Investment 2023-24”. The projects span various sectors including health, education, irrigation, water supply, power, roads, bridges and railways.
Funds for meeting the state share of the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana have also been provided under this scheme to enhance the pace of the projects in these sectors.
The scheme “Special Assistance to Capital Investment 2023-24” was announced in Union Budget 2023 to boost the capital expenditure spending on states and generate a higher multiplier effect. Under the scheme, special assistance is being provided to the state governments in the form of a 50-year interest-free loan up to an overall sum of Rs 1.3 trillion during the financial year 2023-24 (FY24).
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, the ministry said in a statement.
The state-by-state allocations are detailed in the following table
(Rs. in crore)
| Sl. No. | State | Amount Approved |
| Arunachal Pradesh | 1255 | |
| Bihar | 9640 | |
| Chhattisgarh | 3195 | |
| Goa | 386 | |
| Gujarat | 3478 | |
| Haryana | 1093 | |
| Himachal Pradesh | 826 | |
| Karnataka | 3647 | |
| Madhya Pradesh | 7850 | |
| Mizoram | 399 | |
| Odisha | 4528 | |
| Rajasthan | 6026 | |
| Sikkim | 388 | |
| Tamil Nadu | 4079 | |
| Telangana | 2102 | |
| West Bengal | 7523 |
The scheme 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 & 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. An amount of Rs. 15,000 crore is earmarked for Urban Planning Reforms, while additional Rs. 5,000 crore is for incentivising the States for making Urban Local Bodies creditworthy and improving their finances.
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. Another objective of the Scheme is to promote national integration, carry forward the concept of “Make in India” and promote the concept of “One District, One Product (ODOP)” through construction of Unity Mall in each State. An amount of Rs. 5,000 crore has been set aside for this purpose under the Part-VI of the scheme.
Part-VII of the Scheme, with an allocation of Rs. 5,000 crore is for providing financial assistance to States for setting up libraries with digital infrastructure at Panchayat and Ward level for children and adolescents.
A similar scheme entitled ‘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.
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 COVID-19 Pandemic have given a very timely boost to capital spending by States. The flexibility and simplicity of the scheme design has earned liberal praise from Chief Ministers and Finance Ministers of States in successive pre-budget consultations.
