Government releases funds to help states meet their capital expenditure requirements
The government has approved projects worth Rs 2,900 crore in eight states under its scheme to provide them special assistance for capital expenditure in the current financial year. In order to allow the states to implement these projects, the Finance Ministry has so far released an amount of Rs 1,393 crore to them.
The eight states where projects have been approved include Punjab, Bihar, Madhya Pradesh, Chhattisgarh, Himachal Pradesh, Maharashtra, Telangana and Sikkim.
The Special Assistance to States for Capital Expenditure for 2021-22 was launched by the Center in April 2021, to provide financial assistance to the States, on them to manage their capital expenditure due to the furious second wave of the States. to take into account the increasing financial burden. coronavirus pandemic.
The scheme provides financial assistance to the states by way of interest free loans of 50 years up to an aggregate amount of over Rs 15,000 crore during the current financial year.
The plan has three components. Under the first part, funds are provided to eight north-eastern states along with two hill states of Uttarakhand and Himachal Pradesh.
In the second part, funds are provided to all those states which are not covered in the first part and the amount is allocated to the states in proportion to their share of central taxes as decided by the Finance Commission for 2021-22.
The third part of the plan is to encourage states to take privatization or disinvestment initiatives of state public sector enterprises. Here the states are given additional funds in addition to the funds released in the first two parts to achieve the purpose of disinvestment.
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