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India’s ₹1.30 lakh crore special assistance program for states’ capital expenditure in the current fiscal year has unveiled a transformative narrative, with Uttar Pradesh emerging as the primary beneficiary. Official data underscore UP’s substantial share, with ₹18,936 crore approved under the scheme by December 13, marking a significant leap in its capital infrastructure investments. Following UP are Bihar, Madhya Pradesh, and West Bengal, contributing to a wave of infrastructural growth across the nation.
The scheme’s framework offers interest-free loans for 50 years to states, elevating their annual borrowing capacities. This financial initiative stands on a dual foundation: catalyzing growth through public expenditure and fostering citizen-centric reforms at the state level. However, some states, like Kerala and Andhra Pradesh, couldn’t partake due to eligibility constraints, hinting at the challenges in meeting the scheme’s criteria.
Statistics unveil an impressive utilization rate, with over 95% of the budgeted ₹1.30 lakh crore already sanctioned and ₹60,307.19 crore disbursed to states by December 13. Uttar Pradesh not only leads in approvals but also tops the disbursement list, receiving ₹12,458.43 crore, closely trailed by Bihar, Madhya Pradesh, and West Bengal.
Originating in response to the economic downturn amid the Covid-19 pandemic, the scheme, spearheaded by Finance Minister Nirmala Sitharaman, initiated in October 2020 with a ₹12,000 crore interest-free loan program. It aimed at stimulating demand while incentivizing states to implement citizen-centric reforms, fostering economic resilience and inclusive growth.
Subsequent fiscal years saw expansions and enhancements to the scheme, incentivizing privatization, asset recycling, and reforms in critical sectors such as infrastructure, rural development, digitization, and disinvestment of state-owned enterprises. The evolving nature of the scheme catalyzed increased disbursements: ₹11,830.29 crore in 2020-21 escalating to ₹81,195.35 crore in 2022-23, with expectations of surpassing ₹1 lakh crore in 2023-24.
The scheme’s success led to a bolstered allocation of ₹1.30 lakh crore in the 2023-24 budget, signaling a sustained commitment to leveraging capital investments for economic growth. A government official emphasized the scheme’s pivotal role in sustaining growth momentum, particularly as private investments are yet to gain significant traction.
Looking ahead, the scheme’s continuity into 2024-25 is anticipated, serving as a vital catalyst for maintaining growth trajectories amidst evolving economic landscapes. The scheme’s focus on capital investments as growth multipliers showcases a dedicated effort to fortify India’s infrastructural fabric and foster sustainable development nationwide.
