SME Times News Bureau | 12 Dec, 2020
All the
States except Tamil Nadu have availed benefits of the newly announced scheme
for “Special Assistance to States for Capital Expenditure”.
The
scheme was announced by the Finance Minister on 12th October, 2020
as a part of the AatmaNirbhar Bharat package.
The Scheme is aimed at boosting capital
expenditure by the State Governments who are facing difficult financial
environment this year due to the shortfall in tax revenue arising from the
COVID 19 pandemic.
Capital Expenditure has a higher multiplier
effect, enhancing the future productive capacity of the economy, and results in
a higher rate of economy growth.
Therefore, despite the adverse financial position
of the Central Government, it was decided to extend a special assistance to the
State Governments in respect of capital expenditure, in financial year
2020-21.
The Scheme has got very warm response from the
State Governments. So far capital expenditure proposals of Rs. 9,879.61 crore
of 27 States have been approved by the Ministry of Finance.
An amount of Rs. 4,939.81 crore has already been
released to the States as the first instalment under the scheme. State-wise allocation,
approval granted and funds released is attached.
The capital expenditure projects have been
approved in diverse sectors of economy like, Health, Rural Development, Water
Supply, Irrigation, Power, Transport, Education, Urban Development.
The Scheme has three parts. Part –I
of the scheme covers the north-eastern region. Under this part, Rs.200
crores is allocated to 7 north-eastern States (Arunachal Pradesh, Meghalaya,
Manipur, Mizoram, Nagaland, Sikkim and Tripura).
In view of higher population and geographical
area, Assam has been allocated Rs.450 crores under the scheme.
Part-II of the Scheme is, for
all other States not included in Part-I.An amount of Rs.7,500 crores is
earmarked for this part. This amount has been allocated amongst these
States in proportion to their share of central tax as per the interim award of
the 15th Finance Commission for the year 2020-21.
Part-III of the Scheme is aimed
at pushing various citizen-centric reforms in the States. Under this
Part, an amount of Rs.2000 crores is earmarked.
This amount will be available only to those
States who carry out at least 3 out of the 4 reforms specified by the Ministry
of Finance in its letter dated 17th May, 2020 regarding reform
linked additional borrowing permissions.
The 4 reforms are - One Nation One Ration Card,
Ease of doing Business Reform, Urban Local Body/ Utility Reform and Power
Sector Reform.