FinMin approves Rs 9,879 cr capital exp proposal of 27 states

New Delhi: The Finance Ministry on Saturday said it has approved Rs 9,879.61 crore worth capital expenditure proposals of 27 states

Of this, Rs 4,939.81 crore has been released as the first instalment

In a statement, the ministry said all states, except Tamil Nadu, have availed benefits of the newly announced scheme for ‘Special Assistance to States for Capital Expenditure’, which was announced on October 12 as part of AatmaNirbhar Bharat package.

”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,” it said.

The ministry said 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,” it added.

The capital expenditure projects have been approved in diverse sectors like, health, rural development, water supply, irrigation, power, transport, education, urban development.

As part of the AatmaNirbhar Bharat Package, the government had announced that the Centre will offer Rs 12,000 crore special interest-free 50-year loan to states, exclusively for capital expenditure.