In the current fiscal year 2023–2014, the Union Finance Ministry has approved capital investment proposals in 16 states totaling Rs 56,415 crore. The scheme known as "Special Assistance to States for Capital Investment 2023–24" has received approval.
The projects cover a wide range of areas, including power, roads, bridges, education, irrigation, water supply, health, and railways. In order to accelerate projects in these areas, funds for meeting the state share of the Jal Jeevan Mission and the Pradhan Mantri Gram Sadak Yojana have also been provided to states under this scheme.
The state-by-state allocations are detailed in the following table:
The scheme "Special Assistance to States for Capital Investment 2023–24" was announced in the Union Budget 2023–24 in order to provide a boost to capital spending by States and take into account the fact that capital expenditure has a greater multiplier effect.
The program offers state governments special assistance in the form of a 50-year, interest-free loan up to a total of Rs 1.3 lakh crore for the fiscal years 2023–2024.
There are eight parts to the plan, with Part-I allocating Rs 1 lakh crore being the largest. According to the decision made by the 15th Finance Commission, this amount has been divided among the states in proportion to their share of central taxes and duties. Other parts of the plan are for sector-specific projects or are related to reforms.
In Part II of the plan, a sum of Rs. 3,000 crore has been set aside for incentives for States to scrap State Government vehicles and ambulances, the waiver of liabilities on old vehicles, tax breaks for individuals to scrap old vehicles, and the establishment of automated vehicle testing facilities.
The schemes' parts III and IV aim to encourage states to make changes in urban finance and planning. In addition to the Rs 15,000 crore allotted for urban planning reforms, an additional Rs 5,000 crore will be used to encourage states to make urban local bodies more creditworthy and to improve their finances.
In addition, the scheme aims to improve the housing stock for police officers and their families in urban police stations. A monetary sum of Rs. 2,000 crore is reserved for this reason under Part-V of the plan.
Through the construction of Unity Malls in each State, the Scheme also aims to advance national integration, the idea of "Make in India," and the "One District, One Product (ODOP)" concept. the monetary sum of Rs. Under Part VI of the plan, 5,000 crore has been set aside for this purpose.
The allocation of Rs. 5,000 crore in Part VI of the scheme will be given to States to help them build libraries with digital infrastructure for children's and adolescent reading at the Panchayat and Ward levels.
During the previous fiscal year, 2022–23, the Ministry of Finance also implemented a plan that was very similar to it and was called "Special Assistance to States for Capital Investment for 2022–23." The scheme resulted in the approval of proposals for capital investments totaling Rs 95,147.19 crore and the release of Rs 81,195.35 crore to the states.
In the wake of the COVID-19 pandemic, the Ministry of Finance launched a program in 2020–21 to provide financial assistance to states for capital investment or expenditure. This program has given capital spending by states a boost at a very appropriate time.
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