Economy

Finance Ministry approves ₹9,879 crore capital expenditure proposal of 27 states

The Finance Ministry on Saturday said it had approved ₹9,879.61 crore worth of capital expenditure proposals of 27 States.

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

In a statement, the ministry said that all States, except Tamil Nadu, had availed benefits of the newly announced scheme for ‘Special Assistance to States for Capital Expenditure’.

“So far, capital expenditure proposals of ₹9,879.61 crore of 27 states have been approved by the Ministry of Finance,” the ministry said. “An amount of ₹4,939.81 crore has already been released to the states as the first instalment under the scheme,” it added.

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 ₹12,000 crore special interest-free 50-year loan to states, exclusively for capital expenditure.

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Printable version | May 16, 2021 3:06:08 PM | https://www.thehindu.com/business/Economy/finance-ministry-approves-9879-crore-capital-expenditure-proposal-of-27-states/article33316534.ece

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