Capital projects of Rs. 2,903.80 Cr under special assistance scheme gets approval for 8 states

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New Delhi: The Department of Expenditure, Ministry of Finance, has approved capital projects of Rs. 2,903.80 crore in 8 States under the scheme entitled ‘Special Assistance to States for Capital Expenditure for 2021-22’. The Ministry has also released an amount of Rs. 1,393.83 crore to these States namely Bihar, Chhattisgarh, Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Sikkim, and Telangana.

State-wise amount approved and released is as under;

 (Rs. in crore)

S. No.StateAmount ApprovedAmount Released
1Bihar831.00415.50
2Chhattisgarh282.00141.00
3Himachal Pradesh200.00100.00
4Madhya Pradesh649.00324.50
5Maharashtra522.00249.73
6Punjab45.8022.90
7Sikkim200.00100.00
8Telangana174.0040.20
Total2903.801393.83

In view of a higher multiplier effect of capital expenditure and to provide the much-needed resources to the State in the wake of 2nd wave of the COVID-19 pandemic, the scheme ‘Special Assistance to States for Capital Expenditure for 2021-22′ was launched on 29th April 2021. Under the scheme, special assistance is being provided to the State Governments in the form of a 50-year interest-free loan up to an overall sum not exceeding Rs. 15,000 crores during the financial year 2021-22. The scheme has three Parts:

Part-I: This part of the scheme is for the 8 North East States i.e., Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, and Tripura, and for the hill states of Uttarakhand and Himachal Pradesh. Under this part, Rs. 200 crores has been allocated to each of the 7 North-East States and Rs. 400 crore each has been allocated to the States of Assam, Himachal Pradesh, and Uttarakhand.

Part-II: This part of the scheme is for all other States not included in Part-I. An amount of Rs 7,400 crore is allocated for this part. This amount has been allocated amongst these States in proportion to their share of central taxes as per the award of the 15th Finance Commission for the year 2021-22.

Part-III: This part of the scheme is for providing incentives to State Governments for privatization/disinvestment of the State Public Sector Enterprises (SPSEs) and monetization/recycling of assets.  Under this part, States will be provided additional funds under the scheme over and above their allocation under Part-I or Part-II. An amount of Rs.5,000 crore is allocated for this part of the scheme. For this part, there is no State-specific allocation and funds will be provided on a “First-come First-served basis”. 

A similar scheme entitled ‘Special Assistance to States for Capital Expenditure for 2020-21′ was also launched by the Ministry of Finance in the last financial year. Under the scheme, capital expenditure proposals of Rs. 11,911.79 crore of 27 States were approved by the Department of Expenditure and an amount of Rs. 11,830.29 crore was released to the States in 2020-21.