Govt Approves Rs. 56,415 Crore for State Capital Investment

The Centre has approved capital investment proposals amounting to Rs. 56,415 crore in 16 states for the current financial year. This significant allocation has been made under the scheme entitled 'Special Assistance to States for Capital Investment 2023-24'. The scheme aims to bolster capital spending in various sectors, including health, education, irrigation, water supply, power, roads, bridges, and railways. It also includes provisions for funding the state share of projects like Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana.

The 'Special Assistance to States for Capital Investment 2023-24' scheme was introduced in the Union Budget 2023-24, recognizing the higher multiplier effect of capital expenditure and aiming to provide a timely boost to capital spending by states. Under this scheme, the state governments are offered a 50-year interest-free loan, totaling up to Rs. 1.3 lakh crore during the financial year 2023-24.

The scheme comprises eight parts, with Part-I being the largest, having an allocation of Rs. 1 lakh crore. The allocation is distributed among states based on their share of central taxes and duties as per the award of the 15th Finance Commission. The other parts of the scheme are either linked to reforms or targeted towards sector-specific projects.

In Part-II of the scheme, Rs. 3,000 crore has been set aside to incentivize states for scrapping state government vehicles and ambulances. This includes waiving liabilities on old vehicles and providing tax concessions to individuals for scrapping their old vehicles. The funds will also be utilized for the establishment of automated vehicle testing facilities.

Part-III and IV of the scheme focus on encouraging states to implement reforms in Urban Planning and Urban Finance. An amount of Rs. 15,000 crore has been earmarked for urban planning reforms, while an additional Rs. 5,000 crore will be provided to incentivize states for making Urban Local Bodies creditworthy and improving their finances.

Recognizing the need for improved housing facilities for police personnel and their families in urban areas, Rs. 2,000 crore has been allocated under Part-V of the scheme. This will contribute to increasing the housing stock within police stations.

Promoting national integration, supporting the "Make in India" initiative, and advancing the concept of "One District, One Product (ODOP)," the scheme allocates Rs. 5,000 crore under Part-VI for the construction of Unity Malls in each state.

Part-VII of the scheme, with an allocation of Rs. 5,000 crore, is dedicated to providing financial assistance to states for setting up libraries with digital infrastructure at the Panchayat and Ward level. This initiative aims to benefit children and adolescents by enhancing their access to educational resources.

The success of a similar scheme, 'Special Assistance to States for Capital Investment for 2022-23,' executed by the Ministry of Finance in the previous financial year, has laid the foundation for the current scheme. Under the previous scheme, capital investment proposals worth Rs. 95,147.19 crore were approved, and an amount of Rs. 81,195.35 crore was released to the states.

With the approval of capital investment proposals amounting to Rs. 56,415 crore in the current financial year, the government aims to accelerate development across multiple sectors. The allocation will support critical projects in areas such as healthcare, education, infrastructure, and rural development, among others.

In the healthcare sector, the funds will be utilized to enhance the existing infrastructure and strengthen medical facilities. This includes the construction of hospitals, primary health centers, and the procurement of medical equipment and supplies. Investing in the education sector aims to improve educational institutions, establish new schools and colleges, and upgrade existing facilities to ensure access to quality education for all.

The scheme emphasizes the development of irrigation systems and water supply projects to address water scarcity and support agricultural activities. Investments in power generation and distribution infrastructure will contribute to ensuring a reliable and uninterrupted power supply, thereby promoting industrial growth and improving the standard of living.

The allocation for roads and bridges will enable the construction and maintenance of essential transportation networks, facilitating connectivity within and between states. Additionally, investments in railways will focus on improving railway infrastructure, including the development of new lines, station upgrades, and the introduction of modern signaling systems to enhance efficiency and passenger safety.

A significant portion of the allocated funds will support the state's share of projects under the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana. These initiatives aim to provide clean drinking water and improve rural connectivity, respectively, thereby addressing fundamental needs and bridging the rural-urban divide.

In addition to the aforementioned sectors, the scheme allocates funds for initiatives such as housing for police personnel and their families, the construction of Unity Malls to foster national integration and promote the 'Make in India' initiative, and the establishment of libraries with digital infrastructure at the grassroots level to support the education of children and adolescents.