‘Special Assistance to States for Capital Investment 2023-24’ Scheme

June 27, 2023

The Ministry of Finance has introduced a special assistance scheme aimed at enhancing capital spending by states in India. This scheme, announced in the Union Budget 2023-24, has garnered attention for its significant impact on capital investment proposals and the sectors benefiting from it.

Approval of Capital Investment Proposals

The Ministry of Finance has approved capital investment proposals amounting to Rs 56,415 crore for 16 states in the current financial year. This substantial allocation reflects the government’s commitment to promoting growth and development in various regions across the country.

Special Assistance to States for Capital Investment 2023-24

The Special Assistance to States for Capital Investment 2023-24 scheme was unveiled in the Union Budget as a means to bolster capital spending by states. Under this scheme, states are provided interest-free loans amounting to a total of Rs 1.3 lakh crore during the financial year. The objective is to empower states and support their initiatives for infrastructure development and sectoral advancements.

Department of Expenditure’s Approval

The capital investment proposals for the current financial year have been approved by the Department of Expenditure. This department plays a crucial role in assessing the feasibility and viability of proposed projects across sectors and determining their eligibility for financial assistance.

Diverse Sectors Benefiting from the Scheme

Several sectors have been identified for capital investment projects under the scheme. These sectors include health, education, irrigation, water supply, power, roads, bridges, and railways. The infusion of funds in these areas is expected to accelerate progress and contribute to the overall development of the states involved.

Focused Funding for Specific Projects

To ensure the timely completion of critical projects, the Special Assistance scheme specifically targets the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana. By providing dedicated funding to these initiatives, the government aims to expedite the delivery of essential services related to water supply and rural connectivity.

Previous Year’s Achievements

In the previous financial year, a similar scheme titled ‘Special Assistance to States for Capital Investment for 2022-23’ was implemented. Under this scheme, capital investment proposals amounting to Rs 95,147.19 crore were approved, and an impressive Rs 81,195.35 crore was released to the states. This highlights the continuity and success of the government’s efforts in driving capital spending across states.

Continued Focus on Capital Spending

The scheme for financial assistance to states for capital investment/expenditure was first introduced by the Ministry of Finance in the financial year 2020-21, with the aim of addressing the challenges posed by the Covid-19 pandemic. This ongoing scheme has been instrumental in providing a much-needed boost to capital spending by states, stimulating economic growth and infrastructure development.

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