Special Assistance To States For Capital Expenditure Scheme
Part of: GS Prelims and GS-III – Economy
In news
All the states except Tamil Nadu have availed benefits of the newly announced scheme for Special Assistance to States for Capital Expenditure.
Key takeaways
The scheme was announced as a part of the Aatmanirbhar Bharat package.
Aim: Boosting capital expenditure by the State Governments who are facing a difficult financial environment this year due to the shortfall in tax revenue arising from the COVID 19 pandemic.
Capital Expenditure enhances the future productive capacity of the economy, and results in a higher rate of economic growth.
The government had announced that the Centre will offer Rs. 12,000 crore special interest-free 50-year loan to states, exclusively for capital expenditure.
Parts of the scheme: (1) Part–I of the scheme covers the north-eastern region (Rs. 200 crores); (2) Part-II is for all other States (Rs. 7500 crores); (3) Part-III of the scheme is aimed at pushing various citizen-centric reforms in the States.
Under Part III, an amount of Rs. 2000 crores is earmarked.
This amount will be available only to those States which carry out at least three out of the four reforms specified by the Ministry of Finance.
Four Reforms: One nation one ration card, ease of doing business, urban local body/ utility reform and power sector reforms.
As of now, Rs. 4,939.81 crore has been released as the first instalment out of Rs. 9,879.61 crore worth of capital expenditure proposals of 27 States.
