Kerala will benefit from the Centre’s decision to provide an additional ₹15,000 crore to States as interest free 50-year loan for spending on capital projects.
The Department of Expenditure has issued fresh guidelines on the “Scheme of Financial Assistance to States for Capital Expenditure” for the financial year 2021-22. Last year, a sum of ₹ 11,830.29 crore was released to the States and this had helped to sustain the State-level capital expenditure in the pandemic year.
The assistance for the State will be from Part II of the Scheme for Special Assistance to States for Capital Expenditure for 2021-22. An amount of ₹7,400 crore is earmarked and this amount has been allocated amongst these States in proportion to their share of central taxes as per the award of the 15th Finance Commission for the year 2021-22.
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Incentives
The scheme has also provision for providing incentives to States for monetisation/recycling of infrastructure assets and disinvestment of the State Public Sector Enterprises (SPSEs). An amount of ₹5,000 crore is allocated for this part of the scheme.
Under this, States will receive interest free 50-year loan ranging from 33 to 100 per cent of the amount realised by them, through assets monetization, listing and disinvestment.
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