The Department of Expenditure has finalised modalities for Rs 1.75 lakh crore out of the Rs 2 lakh crore allocation under the scheme, introducing reform-linked incentives, including fiscal benchmarks, with a special dedicated window of Rs 25,000 crore for development in hill states. It has earmarked another Rs 25,000 for states that were able to achieve specific capex targets last financial year and in the current fiscal year starting April 1.
The Centre has communicated the modalities to the states in a letter dated April 2, seen by ET.
Under the SASCI scheme, the Centre provides 50-year interest-free loans to states, with part of the assistance linked to the implementation of specific reforms and another portion kept untied, allowing states flexibility in project selection. Of the total amount, Rs 75,000 crore will be the untied portion of the corpus to be given to states and union territories for capital projects identified and submitted by them. Of this, Rs 5,000 crore will be for the creation of digital infrastructure, tourist spots, working women hostels, unity malls and libraries. States will get initially 66% of the amount and the rest 34% of the untied portion will be released only after they have utilised 75% of their allocated fund. “The incentive for the fiscal discipline for the states is kept at Rs 3,000 crore for the current fiscal. However, the Centre May hike the allocation in the coming years,” a senior official told ET.
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The amount will be given on a first-come, first-served basis.
This is also for the first time the Centre introduced a dedicated corpus of Rs 25,000 crore for nine hill states, citing their weaker fiscal indicators and infrastructural constraints.
Under the total outlay, Arunachal Pradesh received the highest allocation of Rs 4,900 crore, followed by Himachal Pradesh with Rs 3,920 crore. Nagaland was allocated Rs 3,880 crore, while Uttarakhand received Rs 3,460 crore and Tripura Rs 3,450 crore. Manipur was allotted Rs 2,400 crore and Meghalaya Rs 2,070 crore. Further, Sikkim has been allocated Rs 820 crore and Mizoram Rs 100 crore.
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The scheme has kept Rs 13,000 crore to develop digital public infrastructure for agriculture to achieve greater transparency in minimum support price, usage and distribution of fertiliser and agriculture landbank, and farmer databases. Another Rs 10,000 crore can be used by states to fund their portion of allocations under central sponsored schemes (CSS).
Additional targeted funds have been earmarked for reforms in sectors such as mining, livestock, compressed biogas, among others.