MC EXCLUSIVE Centre's capex-loan scheme for states sees slow disbursal at Rs 47,000 crore so far

Top five states account for about 48 percent of the total amount disbursed so far by the Centre.

The central government has released a little over Rs 47,000 crore to states till October 21 under its Special Assistance for Capital Investment Scheme (SASCI), Moneycontrol has learnt.

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.

According to government officials, the Centre had earlier thought of disbursing over Rs 70,000 crore till October-end, but the actual figure so far is much lower (Rs 47,129 crore).

However, the Centre feels it will meet the target for the full year, an official said.

What is SASCI?

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. Further, 8 states increased the Floor Area Ratio for commercial buildings to 7 in Central Business Districts and 5 in other areas.

Scheme plan for FY27

For FY27, the government would continue the scheme, likely with a similar estimate, which will be mentioned in the upcoming Budget, one official said.

According to internal data of the Department of Expenditure,  the Centre has released over Rs 8,400 crore to Uttar Pradesh – the highest beneficiary of the scheme so far; Rs 4,000 crore to Bihar; Rs 3,700 crore to Madhya Pradesh; Rs 3,500 crore to West Bengal; and Rs 3,100 crore to Maharashtra, as of October 21.

These five states account for about 48 percent of the total amount disbursed so far by the Centre.

As per the scheme’s guidelines, the Centre has allocated around Rs 60,000 crore, of the total Rs 1.5 lakh crore, to ‘untied’ projects– meaning, states are free to choose which project to spend on. The remaning amount is linked to specific projects as well as reforms.

Going forward, the Centre would release more funds for ‘untied’ projects than the amount pegged right now, in case it feels that the capex pace is not picking up at the state level, said sources. The Centre is open to tweaking its guidelines, they said. The guidelines are not publicly available.

Further, close to Rs 52,000 crore is earmarked for undertaking governance, land-related, agriculture, urban planning, ease-of-doing business, and financial management reforms, said sources.

Moneycontrol had reported in May 2025 that Rs 13,000 crore (of the Rs 52,000 crore) will be released to states, provided they build municipal cadres and digital interventions for improved governance; integrate the property tax portal with a unique ID and diversify revenue sources, implement town planning and land pooling schemes, revitalise central business districts, and build theme-based greenfield cities across three categories of reforms.