Andhra, Kerala yet to get any approval from Centre for FY24 capex loans

Over the last few years, the Centre has encouraged states to invest more as their capital expenditure plays a crucial role in India’s growth trajectory.

Andhra Pradesh and Kerala are the only two states yet to get the Centre's nod for any loans in 2023-24 under the Rs 1.3 lakh-crore Scheme for Special Assistance to States for Capital Investment, according to data shared by the Finance Ministry with the Parliament.

In a written response to a question in the Lok Sabha on December 18, Minister of State for Finance Pankaj Chaudhary said projects worth Rs 98,157 crore from 26 states under the scheme had been approved as of December 12.

However, Andhra Pradesh and Kerala were the only two states that had not had any proposals approved by the finance ministry.

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As per a footnote in the data provided by Chaudhary to the Lok Sabha, no funds had been approved for Andhra Pradesh and Kerala as they had not "met the eligibility criteria prescribed under the Scheme".

In a separate answer, Chaudhary said that Rs 60,307 crore worth of these loans had been released to the states under the scheme.

Again, in addition to Andhra Pradesh and Kerala, Manipur and Punjab had also not been released any funds other capex loan scheme as they had not met the eligibility criteria prescribed under the scheme for 2023-24.

In terms of approvals, Manipur received the Centre's nod for proposals worth Rs 759 crore, while Punjab had got an OK for proposals to the tune of Rs 209 crore, as of December 13.

The state-wise break-up is as follows (in Rs crore):

The Scheme for Special Assistance to States for Capital Investment has eight parts, with seven of them worth Rs 30,000 crore either linked to reforms or for sector-specific projects. The untied part has the largest allocation of Rs 1 lakh crore.

The Rs 1.3 lakh crore scheme is part of the Centre's record capital expenditure target of Rs 10 lakh crore for 2023-24, under which it will extend interest-free loans maturing in 50 years to states for their capex needs. Moneycontrol had reported in August, quoting a top government official, that states are unlikely to fully utilise the allocated amount for 2023-24.

As per latest data from the Controller General of Accounts, the Centre had spent on Rs 5.47 lakh crore - or 54.7 percent of the full-year target - on  capex in April-October 2023.