Quick Summary
In a landmark announcement, Finance Minister Nirmala Sitharaman revealed that the Centre plans to treat capital expenditure (capex) loans given to states as grants. This transformative policy shift is designed to support state governments by relieving them of the repayment burden and enhancing their capacity to undertake significant infrastructure projects. The Scheme for Special Assistance to States for Capital Expenditure, introduced post-Covid, has already disbursed Rs 2.17 trillion and is s
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FAQ :
The Centre plans to convert capital expenditure (capex) loans given to states into grants, removing the repayment obligation for the states.
The conversion aims to support state governments by relieving them of the repayment burden, thereby enhancing their capacity to undertake significant infrastructure projects and foster economic recovery.
The scheme is called the 'Scheme for Special Assistance to States for Capital Expenditure'.
The scheme has already disbursed Rs 2.17 trillion and is set to provide an additional Rs 1.5 trillion in FY25, bringing the total assistance to Rs 3.7 trillion from FY21 to FY25.
States will be empowered to complete long-pending projects and initiate new ones without the constraint of repayment obligations, leading to enhanced infrastructure development and economic growth.
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