Finance Ministry approves capital expenditure projects worth Rs 2,903.80 croreThe Department of Expenditure, Ministry of Finance, has approved capital expenditure projects worth Rs 2,903.80 crore in eight states under the Scheme Special Assistance to States for Capital Expenditure for 2021-22.

The Ministry has also released an amount of Rs 1,393.83 crore to these states namely Bihar, Chhattisgarh, Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Sikkim and Telangana.

The amounts approved by the Finance Ministry for the states are – Bihar (Rs 831 crore), Chhattisgarh (282 crore), Himachal Pradesh (200 crore), Madhya Pradesh (Rs 649 crore), Maharashtra (Rs 522 crore), Punjab (Rs 45.80 crore), Sikkim (Rs 200 crore) and Telangana (Rs 174 crore).

The amounts released by the Ministry for the states are – Bihar (Rs 415.50 crore), Chhattisgarh (141 crore), Himachal Pradesh (100 crore), Madhya Pradesh (Rs 324.50 crore), Maharashtra (Rs 249.73 crore), Punjab (Rs 22.90 crore), Sikkim (Rs 100 crore) and Telangana (Rs 40.20 crore).

In view of a higher multiplier effect of capital expenditure and to provide the much-needed resources to the state in the wake of the second wave of the COVID-19 pandemic, the Scheme was launched on 29 April 2021.

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 not exceeding Rs 15,000 crore during FY22. The Scheme has three parts:

Part-I: This part of the Scheme is for the eight North-East states i.e. Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura, and for Uttarakhand and Himachal Pradesh. Under this part, Rs 200 crore has been allocated each of the seven North-East states and Rs 400 crore each has been allocated to Assam, Himachal Pradesh and Uttarakhand.

Part-II: This part of the Scheme is for all other states not included in Part-I. An amount of Rs 7,400 crore is allocated for this part. This amount has been allocated amongst these states in proportion to their share of central taxes as per the award of the 15th Finance Commission for 2021-22.

Part-III: This part of the Scheme is for providing incentives to state governments for privatisation/ disinvestment of the state public sector enterprises (SPSEs) and monetisation/ recycling of assets. Under this part, states will be provided additional funds under the scheme over and above their allocation under Part-I or Part-II.

An amount of Rs 5,000 crore is allocated for this part of the Scheme. For this part, there is no state-specific allocation and funds will be provided on first-come first-served basis.

A similar scheme entitled Special Assistance to States for Capital Expenditure for 2020-21 was also launched by the Ministry of Finance in FY21.

Under the scheme, capital expenditure proposals of Rs 11,911.79 crore of 27 states were approved by the Department of Expenditure and an amount of Rs 11,830.29 crore was released to the states in 2020-21.


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