MC EXCLUSIVE Centre disburses Rs 61,000 crore to states under capex loan scheme till mid-December

The Budget has pegged SASCI allocation at Rs 1.5 lakh crore for FY26.

The central government has released about Rs 61,000 crore to states under the Special Assistance for Capital Investment Scheme in FY26 so far, with Uttar Pradesh receiving the most. The scheme offers 50-year interest-free loans to boost state infrastructure.

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The central government has released about Rs 61,000 crore to states till December 15 in FY26 under its Special Assistance for Capital Investment Scheme (SASCI), Moneycontrol has learnt from government officials.

The Union Budget has pegged SASCI allocation at Rs 1.5 lakh crore for FY26, similar to last fiscal year. In FY25, the Centre had disbursed Rs 149,484 crore to states.

Government officials say that "this year too, the Budgeted target is likely to be met." The figure till mid-December in FY26 is "not starkly different" from the amount released till December 15 in the previous financial year, the officials said, but didn’t reveal the accurate amount.

In the period between April 1-December 3 FY25, the Centre had released Rs 50,571 crore to the states under the scheme, the finance ministry had informed the Parliament last year.

What is the capex loan scheme?

Launched in 2020-21, SASCI is a central government programme that provides state governments with 50-year interest-free loans to boost capital expenditure, thereby stimulating economic growth, creating employment opportunities, and enhancing infrastructure development across the country.

The 50-year interest-free loans to states are provided through two channels: untied funds for priority state projects, and tied funds conditional upon specific reforms. Through the tied component, the ministry has, in recent years, pushed states to modernise building codes, digitise land records, scrap old government vehicles, and implement financial management reforms.

In FY25, through the SASCI, 22 states carried out reforms in building byelaws for industrial and commercial plots, 18 reduced land wastage, and parking for standalone factories to less than 30 percent, and 12 states doubled the built-up area permitted for flatted factories.

Allocation to different states

According to internal data, seen by Moneycontrol, Uttar Pradesh has received the maximum amount of Rs 8,465 crore under the scheme till December 15. Assam has received Rs 5,597 crore and Maharashtra has received Rs 4,584 crore. Rajasthan and Bihar are at fourth and fifth places, receiving Rs 4,113 crore and Rs 3,985 crore, respectively.

"Since its launch, the SASCI scheme has transformed from a counter-cyclical COVID response to a structural capex-financing pillar to states. This scheme is employment accretive and growth inducing for states and can lead to better fiscal conditions. Even the states have repeatedly sought the continuity and increased outlay under this scheme," said Sandeep Vempati, Economist, Bharatiya Janata Party.

Meanwhile, till November in FY26, as many as 22 states have incurred capex that accounts for around 38 percent of their Budget estimates (BE), an analysis of the data shared by Comptroller and Auditor General of India (CAG) showed. The capex by same states, in April-November of FY25, amounted to about 39 percent of BE.

On the other hand, Central government’s capex in April-October is 55 percent of Budget Estimates.

Economists say the slower momentum in states capex is due to a sharp slowdown in revenue collection--owing to GST cuts and lower transfers from Centre-- which is likely to cause their full year’s capex to be slightly below BE.

"Centre is also facing similar sharp slowdown in tax revenue collection but they are still expected to meet their capex target and fiscal deficit target. Centre’s revenue will get support from RBI dividend, PSU dividend , other non-tax revenue and excise duty collection," said Gaura Sen Gupta, Chief Economist, IDFC FIRST Bank.