Aiming at providing a timely boost to capital spending by states, the Department of Expenditure has approved investment projects in several sectors including health, education, irrigation, power, roads and railways among others. The said department has also included the state share of two projects, namely Jal Jeevan Mission and Pradhan Mantri Gram sadak Yojana under this scheme.
“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,” the release read.
The ministry has divided the scheme into eight parts.
For the first part,Rs 1 lakh crore has been allocated which is further distributed among states in proportion to their share of central taxes and duties.
Part-II sees allocation of Rs 3,000 crore incentives for scrapping of vehicles, including state government vehicles and ambulances. The funds will also be used to waive liabilities on old vehicles, provide tax concessions to individuals for scrapping of old vehicles and set up of automated vehicle testing facilities.Parts III & IV focus on incentives to states for reforms in urban planning and finance. For the same, Rs 15,000 crore and Rs 5,000 have been set aside respectively. Meanwhile, the government has set aside an amount of Rs 2,000 crore in order to increase housing stock for police personnel and their families, constituting part-V of the scheme.
The government has earmarked an amount of Rs 5,000 crore under Part-VI to build “Unity Mall” in each state. The idea is to strengthen the concept of ‘Make in India’ and ‘One District, One Product’.
Other parts of the scheme are either linked to reforms or are for sector specific projects.
Bihar received the highest amount of Rs 9,640 crore, followed byMadhya Pradesh at Rs 7,850 crore. Sikkim and Goa received the least amount of Rs 388 crore and Rs 386 crore respectively.
In the previous year, the ministry executed a similar scheme ‘Special Assistance to States for Capital Investment for 2022-23′ under which capital investment proposals of Rs. 95,147.19 crore were approved of which an amount of Rs. 81,195.35 crore was released to the states.