Centre to ease conditions for states to borrow 50-year interest-free loans: Report

These loans will help state government spend more on infrastructure development, enabling overall growth, the paper quoting citing sources.

In a step to boost spending, the Centre will make it easier for states to borrow 50-year interest-free loans, Mint reported on January 6.

The government will ease some of the criteria required to be eligible for the loans under the Special Assistance for Capital Investment scheme, the report cited sources as saying.

The move comes after India’s gross domestic product (GDP) growth declined to 5.4 percent in the September quarter, which slowed to its lowest in two years on low government spending and declining consumption, the report said.

In December, the ministry of finance said that country's economic growth is expected to reach around 6.5 percent in real terms for FY25 on the back of strong rural and urban demand, improved capital formation, and robust government spending.

These loans will help state government spend more on infrastructure development, enabling overall growth, the report said.

Moneycontrol couldn't verify the report independently.

Some of the conditions include reform measures to incentivise scrapping of old government vehicles and ambulances, improving urban planning, finances, developing housing projects for police personnel, among other things, the report said.