Centre clears Rs 56,415-crore capex loans to 16 states so far this year

Godrej Properties had recorded a 58 percent jump in Q4FY23 net profit.

The Centre has approved the grant of interest-free and long-term capital expenditure loans of Rs 56,415 crore to 16 states so far in 2023-24, an official release has said.

The approval has been given under the scheme entitled ‘Special Assistance to States for Capital Investment 2023-24’, which is aimed at giving timely boost to capital spending by the state governments.

The maximum amount, of Rs 9,640 crore, has been allocated to Bihar, followed by Rs 7,850 crore to Madhya Pradesh, Rs 7,523 crore to West Bengal, Rs 6,026 crore to Rajasthan and Rs 4,528 crore to Odisha.

"Capital investment projects in diverse sectors have been approved including health, education, irrigation, water supply, power, roads, bridges and railways. Funds for meeting the State share of Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana have also been provided to the States under this scheme to enhance pace of the projects in these sectors," the release issued by the Finance Ministry said.

As announced in the Union Budget 2023-24, the Centre plans to provide an overall sum of Rs 1.3 lakh crore to the state governments, in the form of 50-year interest-free capex loans, in FY24. In the previous financial year, an amount of Rs 81,195 crore was released to the states.

The scheme has eight parts -- the first being the largest with allocation of Rs 1 lakh crore.  This amount will be allocated amongst states in proportion to their share of central taxes and 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 the second part of the scheme, an amount of Rs 3,000 crore has been set aside  for providing incentives to states for scrapping of old 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.

The third and fourth parts 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.