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Centre gives Rs 15,000 crore in long-term loans to states for capex spending

The loans include Rs 5,000 crore to incentivise states to monetise their assets and divest their PSUs.

April 30, 2021 / 04:38 PM IST

The Finance Ministry on April 30 said it would provide Rs 15,000 crore worth of long-term loans to states for their capital expenditure needs. This would include around Rs 5,000 crore for incentivising states to carry out monetisation of their idle assets and divest their companies, an official statement said.

“The Ministry of Finance has decided to provide an additional amount of up to Rs 15,000 crore to States as interest free 50-year loan for spending on capital projects. The Department of Expenditure has issued fresh guidelines in this regard on the “Scheme of Financial Assistance to States for Capital Expenditure” for the financial year 2021-22,” said the press release.

This move follows a similar step taken last year, when as part of the ‘Aatmanirbhar Bharat’ set of announcements, the Centre provided Rs 12,000 crore as a 50-year loan to states to enable them to carry out capital expenditure work in a pandemic-hit year.

As part of her capital stimulus push in the budget, Finance Minister Nirmala Sitharaman had said: “We would also be providing more than Rs 2 lakh crore to states and autonomous bodies for their capital expenditure. We will also work out specific mechanisms to nudge states to spend more of their budget on creation of infrastructure.”