Sunday, October 17, 2021

Ministry of Finance approves capital expenditure projects of over Rs 2,900 crore in 8 states

The Finance Ministry on September 25 announced that it has approved capital expenditure projects in eight states totalling Rs 2,903.80 crore under the ‘Special Assistance to States for Capital Expenditure for 2021-22’ scheme.

Bihar, Chhattisgarh, Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Sikkim, and Telangana are the states included in this scheme. These states have already received Rs 1,393.83 crore from the Ministry. Bihar has received the most amount of money, Rs 415.50 crore, and the Finance Ministry has sanctioned Rs 831 crore for the state. Punjab has been given the smallest amount of money, Rs 45.80 crore. Under the plan, the state had already received Rs 22.90 crore.

In the aftermath of the second wave of the COVID-19 pandemic, the government created the ‘Special Assistance to States for Capital Expenditure for 2021-22’ plan, with the goal of increasing capital expenditure’s multiplier impact and providing much-needed resources to states. The project began on April 29, 2021.

According to an official Finance Ministry statement, states will receive special assistance in the shape of a 50-year interest-free loan up to a total amount of Rs 15,000 crore during the financial year 2021-22. The plan is divided into three sections.

The first part of the project covers Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, and Tripura, as well as Uttarakhand and Himachal Pradesh’s hill states. Under this section, seven North-East states will receive Rs 200 crore, while Assam, Himachal Pradesh, and Uttarakhand will receive Rs 400 crore apiece.

The second section is for all states that aren’t covered in the first. This section has been given a budget of Rs 7,400 crore. The statement read, “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.”

The scheme’s third element provides incentives to states for privatisation and disinvestment of State Public Sector Enterprises (SPSEs), as well as asset monetisation and recycling. States will get additional cash under this section of the scheme in addition to their allocations under the first two segments. This section of the program has been given a budget of Rs 5,000 crore. There will be no state-specific allocation for this section, and funds will be distributed on a first-come, first-served basis.

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