The Finance Ministry has approved investments worth Rs 56,415 crore in 16 states as part of the 'Special Assistance to States for Capital Investment 2023-24’ scheme on 26 June, 2023.
In order to boost capital spending at the state-level, the Department of Expenditure has approved investment projects in sectors including irrigation, power, roads, railways, health and education, among others. Two projects, namely Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana are also covered under this scheme. Special assistance will be provided in the form of a 50-year interest-free loan up to an overall sum of Rs 1.3 lakh crore during FY24.
The scheme is divided into eight parts. For the first part, an allocation of Rs 1 lakh crore is further distributed among states, which will be proportionate to their share of central taxes and duties.
Part-II includes a grant of Rs 3,000 crore incentives towards scrapping of vehicles, including state government vehicles and ambulances, and is also applicable to waive liabilities on old vehicles, extend tax concessions to individuals for scrapping of old vehicles and putting up automated vehicle testing facilities.
Parts-III and IV will offer incentives to states for reforms in urban planning and finance, with Rs 15,000 crore and Rs 5,000 earmarked for these components respectively. Further, Rs 2,000 crore has been budgeted for increasing the housing stock for police personnel and their families, for Part-V of the scheme.
Under Part-VI, the government has apportioned an amount of Rs 5,000 crore to build 'Unity Mall' in each state, to fructify the concept of 'Make in India' and 'One District, One Product'. The remaining parts of the scheme are reforms-based or for sector specific projects.
Bihar received the highest amount of Rs 9,640 crore, followed by Madhya Pradesh at Rs 7,850 crore. Goa received the least amount of Rs 386 crore under the scheme.
