27 States avail benefits of the “Scheme for Special Assistance to States for Capital Expenditure”

Capital Expenditure Projects worth ₹ 9,879.61 crore approved

An amount of ₹ 4,939.81 crore released as first instalment

All the States except Tamil Nadu have availed benefits of the newly announced scheme for “Special Assistance to States for Capital Expenditure”.   The scheme was announced by the Finance Minister on 12^th October, 2020 as a part of the Aatma Nirbhar Bharat package.

The Scheme is aimed at boosting capital expenditure by the State Governments who are facing difficult financial environment this year due to the shortfall in tax revenue arising from the COVID 19 pandemic.  Capital Expenditure has a higher multiplier effect, enhancing the future productive capacity of the economy, and results in a higher rate of economy growth.  Therefore, despite the adverse financial position of the Central Government, it was decided to extend a special assistance to the State Governments in respect of capital expenditure, in financial year 2020-21. 

The Scheme has got very warm response from the State Governments. So far capital expenditure proposals of ₹ 9,879.61 crore of 27 States have been approved by the Ministry of Finance.  An amount of ₹ 4,939.81 crore has already been released to the States as the first instalment under the scheme. State-wise allocation, approval granted and funds released is attached. 

The capital expenditure projects have been approved in diverse sectors of economy like, Health, Rural Development, Water Supply, Irrigation, Power, Transport, Education, Urban Development. 

The Scheme has three parts.  Part –I of the scheme covers the north-eastern region.  Under this part, ₹ 200 crores is allocated to 7 north-eastern States (Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura).  In view of higher population and geographical area, Assam has been allocated ₹ 450 crores under the scheme.

Part-II of the Scheme is, for all other States not included in Part-I.An amount of ₹ 7,500 crores is earmarked for this part.  This amount has been allocated amongst these States in proportion to their share of central tax as per the interim award of the 15^th Finance Commission for the year 2020-21.

Part-III of the Scheme is aimed at pushing various citizen-centric reforms in the States.  Under this Part, an amount of ₹ 2000 crores is earmarked.  This amount will be available only to those States who carry out at least 3 out of the 4 reforms specified by the Ministry of Finance in its letter dated 17^th May, 2020 regarding reform linked additional borrowing permissions. The 4 reforms are - One Nation One Ration Card, Ease of doing Business Reform, Urban Local Body/ Utility Reform and Power Sector Reform. 

Scheme for Special Assistance to States for Capital Expenditure
(Rs. in crore)
S.No	State	Amount Allocated	Amount Approved	Amount Released
1	Andhra Pradesh	344.00	344.00	172.00
2	Arunachal Pradesh	200.00	200.00	100.00
3	Assam	450.00	450.00	225.00
4	Bihar	843.00	843.00	421.50
5	Chhattisgarh	286.00	286.00	143.00
6	Goa	32.00	32.00	16.00
7	Gujarat	285.00	285.00	142.50
8	Haryana	91.00	91.00	45.50
9	Himachal Pradesh	450.00	450.00	225.00
10	Jharkhand	277.00	277.00	138.50
11	Karnataka	305.00	305.00	152.50
12	Kerala	163.00	163.00	81.50
13	Madhya Pradesh	660.00	660.00	330.00
14	Maharashtra	514.00	514.00	257.00
15	Manipur	200.00	200.00	100.00
16	Meghalaya	200.00	200.00	100.00
17	Mizoram	200.00	200.00	100.00
18	Nagaland	200.00	200.00	100.00
19	Odisha	388.00	388.00	194.00
20	Punjab	150.00	146.50	73.25
21	Rajasthan	501.00	501.00	250.50
22	Sikkim	200.00	200.00	100.00
23	Tamil Nadu	351.00	0.00	0.00
24	Telangana	179.00	179.00	89.50
25	Tripura	200.00	200.00	100.00
26	Uttar Pradesh	1501.00	1501.00	750.50
27	Uttarakhand	450.00	434.11	217.06
28	West Bengal	630.00	630.00	315.00
	Total	10250.00	9879.61	4939.81

 

Special assistance for state capital expenditure provides targeted allocations and reform-linked funds; first instalments released to participating states. The Scheme for Special Assistance to States for Capital Expenditure comprises three parts: a fixed allocation for north-eastern States (with higher allocation for Assam), a proportional allocation to other States based on interim 15th Finance Commission tax shares, and a reform-linked tranche available only to States implementing at least three of four specified citizen-centric reforms. The scheme aims to boost state capital spending across sectors including health, water, irrigation, power and transport; 27 States' projects totalling Rs. 9,879.61 crore have been approved and the first instalment totalling Rs. 4,939.81 crore released.