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Center approves Rs 2,903.80 crore capital spending projects in 8 states

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The Ministry of Finance announced on Saturday that it had approved capital expenditure projects worth Rs 2,903.80 crore in eight states under the program called “Special Assistance to States for Capital Expenditures for 2021-2022 “.

The states named under this program are Bihar, Chhattisgarh, Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Sikkim and Telangana. The ministry has already released Rs 1,393.83 crore for these states

Bihar received the highest amount at Rs 415.50 crore and Rs 831 crore was approved for the state by the Ministry of Finance. The Punjab was allocated the lowest amount at Rs 45.80 crore. The state had already received Rs 22.90 crore under the program.

The government had launched the program “Special Assistance to States for Capital Expenditures for 2021-2022” taking into account a higher multiplier effect of capital expenditure and to provide much-needed resources to States following the second wave. of the COVID-19 pandemic. The device was launched on April 29, 2021.

Under this program, special assistance is provided to States in the form of a 50-year interest-free loan up to an aggregate amount not to exceed Rs 15,000 crore in the 2021-2022 fiscal year, said an official statement from the Ministry of Finance. The diagram is made up of three parts.

The first part of the program covers eight northeastern states, namely Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura, as well as the mountainous states of Uttarakhand and Himachal Pradesh. As part of this part, Rs 200 crore has been allocated to each of the 7 northeastern states and Rs 400 crore each has been allocated to the states of Assam, Himachal Pradesh and Uttarakhand.

The second part concerns all States not included in the first part. An amount of Rs 7,400 crore has been allocated for this part. “This amount was distributed among these States in proportion to their share of central taxes in accordance with the allocation of the 15th Finance Committee for the year 2021-2022”, we can read in the press release.

The third part of the program aims to provide incentives to states for the privatization and divestment of public sector enterprises (SPSE) and the monetization / recycling of assets. Under this part, states will receive additional funds under the scheme in addition to their allocation under the first two parts.

An amount of Rs 5,000 crore has been allocated for this part of the program. For this part, there is no specific allocation to the state and funds will be provided on a “first come, first served” basis.

Read also: Need to integrate green finance: Deputy Governor of the RBI

Also read: Divestment will create more jobs and increase PSU income: MoS Finance


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