Centre Sanctions Rs 46,000 Cr Capex Loan To States: Report

In line with the total allocation of Rs 1.5 lakh crore for the current financial year, the Centre has sanctioned Rs 46,000 crore as capital expenditure (capex) loans to states, as per the media reports. Rs 25,000 crore has been released as part of the approved sanction.

Aimed at providing an incentive for the state governments to increase their capital expenditure during the fiscal, out of the Rs 95,000 crore conditional loan, Rs 25,000 crore has been linked to the performance of the states regarding their status in capital expenditure.

As per this, around half of the corresponding share will be made available to the states only when they are successful in registering a 10 per cent or more growth in their capex during the FY24. The states would have to report a capex growth of 10 per cent this fiscal to get their hands on the remaining 50 per cent share.

In FY2024, the Centre had allocated Rs 1.30 lakh crore in the form of capex loans to the states. It was later adjusted to Rs 1.05 lakh crore due to the inability of a few states to surpass the minimum eligibility requirements. Kerala, Punjab and Andhra Pradesh did not get the loans. The Centre has marked Rs 15,000 crore as an allocation towards industrial growth and livelihood-friendly cities and will be provided to the states, as per the media reports.

The Centre has linked another Rs 15,000 crore for the completion of railways, metro rail and power projects. In addition, the urban land reforms and rural land reforms have also been allocated Rs 5,000 crore each. The availability of funds to the states will be based on the latter’s performance in geographic information system mapping and assignment of unique land parcel identification numbers among other parameters, as stated by the media reports.