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SCHEME FOR SPECIAL ASSISTANCE TO STATES FOR CAPITAL EXPENDITURE FOR 2021-22

27 States avail benefits of the Scheme for Special Assistance to States for Capital Expenditure. All the States except Tamil Nadu have availed benefits.Ministry of Finance Government of India has decided to provide an additional amount of upto Rs 15,000 crore to States as interest free 50 year loan for spending on capital projects

Most of the states facing difficultly  due to the shortfall in tax revenue arising from the COVID 19 pandemic. This will affect overall economy of India.

How this scheme helps ?

 Capital Expenditure has a higher multiplier effect in enhancing the future productive capacity of the economy and results in a higher rate of economy growth.

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

The Budget estimate of the government’s capital expenditure for the year

  • 2020-21 was Rs 1,084,748 crore.
  • The revised estimates of capital expenditure for the 2019-20 Budget came at Rs 1,059,472 crore
  • The actual for the 2018-19 Budget stood at Rs 915,670 crore

The Scheme for Special Assistance to States for Capital Expenditure for 2021-22 has three Parts:

  • Part-I: This part of the scheme is for the North-East and Hill States and an amount of Rs.2,600 crore has been earmarked for this part. Out of this, Assam, Himachal Pradesh and Uttarakhand will get Rs 400 crore each while remaining States in this group have been allocated Rs 200 crore each.
  • Part-II: This part of the scheme is for all other States not included in Part-I. An amount of Rs 7,400 crore is earmarked for this part. This amount has been allocated amongst these States in proportion to their share of central taxes as per the award of the 15th Finance Commission for the year 2021-22.
  • Part-III: This part of the scheme is for providing incentives to States for monetization/recycling of infrastructure assets and disinvestment of the State Public Sector Enterprises (SPSEs).
    • An amount of Rs.5,000 crore is allocated for this part of the scheme.
    • Under this part, States will receive interest free 50 years loan ranging from 33% to 100% of the amount realised by them, through assets monetization, listing and disinvestment.

 

Tags: Current Affairs, Economics

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