New Delhi, Apr 30 (PTI): The finance ministry on Friday stated it can give an additional Rs 15,000 crore to the states as an interest-free 50-year loan for spending on capital projects within the present fiscal.
The Scheme for Special Assistance to States for Capital Expenditure for 2021-22 additionally consists of incentives to states for monetising/ recycling of infrastructure belongings and disinvestment of the State Public Sector Enterprises (SPSEs).
“The Ministry of Finance, Government of India has decided to provide an additional amount of upto Rs 15,000 crore to states as interest free 50 year loan for spending on capital projects,” the finance ministry stated in an announcement.
The Scheme for Special Assistance to States for Capital Expenditure for 2021-22 has three elements, together with linkage of asset monetisation with funds launch by the Centre.
For the North-East and Hill States, the Centre has earmarked Rs 2,600 crore. Out of this, Assam, Himachal Pradesh and Uttarakhand will get Rs 400 crore every whereas remaining states on this group have been allotted Rs 200 crore every.
An quantity of Rs 7,400 crore is earmarked for all different states. This quantity has been allotted amongst these states in proportion to their share of central taxes as per the award of the fifteenth Finance Commission for the yr 2021-22, the ministry stated. The third a part of the scheme is for offering incentives to States for monetisation/ recycling of infrastructure belongings and disinvestment of SPSEs.
“An amount of Rs 5,000 crore is allocated for this part of the scheme. Under this part, states will receive interest free 50 years loan ranging from 33 per cent to 100 per cent of the amount realised by them, through assets monetisation, listing and disinvestment,” the ministry added.
Finance Minister Nirmala Sitharaman in her 2021-22 Budget speech stated that to incentivise states to take to disinvestment of their public sector firms, the Centre would work out an incentive bundle of central funds for states.
The authorities has budgeted to elevate Rs 1.75 lakh crore via CPSE disinvestment within the present fiscal, over 5 instances what it raised within the final monetary yr. ? The minister had additionally stated that the Centre would work out particular mechanisms to nudge states to spend extra of their finances on creation of infrastructure.
Monetisation of belongings unlocks their worth, eliminates their holding price and allows scarce public funds to be deployed to new projects, thus rushing up the implementation of the National Infrastructure Pipeline, the ministry stated.
Under the Scheme for Special Assistance to States for Capital Expenditure, monetary help is supplied by the Centre to the state governments within the type of 50-year curiosity free loan. As in opposition to Rs 12,000 crore earmarked for the scheme for the monetary yr 2020-21, a sum of Rs 11,830.29 crore was launched to the states. “In view of the positive response to the scheme and considering the requests of the state governments, the government has decided to continue the scheme in the year 2021-22,” the ministry stated.
Capital expenditure creates employment, particularly for the poor and unskilled, has a excessive multiplier impact, enhances the longer term productive capability of the economic system, and leads to the next fee of financial progress. Therefore, regardless of the opposed monetary place of the central authorities, it was determined final yr to launch a “Scheme for Special Assistance to States for Capital Expenditure”, it added.
Funds supplied to the states below the scheme by the federal government shall be used for new and ongoing capital projects. The funds might also be used for settling pending payments in ongoing capital projects.Â
Â
#mute
