27 States availed ‘Special Assistance for Capital Expenditure’ scheme, Rs 4,939 Cr released: FinMin

New Delhi: The Ministry of Finance stated in a press communication on Saturday, 12th December, the all 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 Finance Minister Nirmala Sitharaman on 12th October 2020 as a part of the AatmaNirbhar Bharat package. The Finance Ministry said the scheme is aimed at boosting capital expenditure by State Governments that are facing difficult financial environments this year due to the shortfall in tax revenue arising from the Covid-19 pandemic, adding that capital expenditure has a higher multiplier effect, enhancing the future productive capacity of the economy, and results in a higher rate of economic growth. Therefore, despite the adverse financial position of the Central Government, it was decided to extend special assistance to the State Governments in respect of capital expenditure, in the financial year 2020-21, the Ministry revealed.

The Scheme has got a very warm response from the State Governments, said the Finance Ministry, adding that, so far, capital expenditure proposals of Rs. 9,879.61 crore of 27 States have been approved. An amount of Rs. 4,939.81 crore has already been released to the States as the first installment under the scheme. State-wise allocation, approval granted, and funds released as stated by the Finance Ministry are provided in the table at the end of this article.

Capital expenditure projects have been approved in diverse sectors of the economy like Health, Rural Development, Water Supply, Irrigation, Power, Transport, Education, and Urban Development, according to the Ministry. The Scheme has three parts.

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

Part-II of the Scheme is for all other states not included in Part-I. An amount of Rs. 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 15th 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 Rs. 2000 crores is earmarked. This amount will be available only to those states that carry out at least 3 out of the 4 reforms specified by the Ministry of Finance in its letter dated 17th 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.StateAmount AllocatedAmount ApprovedAmount Released
1.Andhra Pradesh344.00344.00172.00
2.Arunachal Pradesh200.00200.00100.00
9.Himachal Pradesh450.00450.00225.00
13.Madhya Pradesh660.00660.00330.00
23.Tamil Nadu351.000.000.00
26.Uttar Pradesh1501.001501.00750.50
28.West Bengal630.00630.00315.00

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The ID Staff

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