A majority of states on Saturday expressed support for the Union government’s reform agenda aligned with the vision of “Viksit Bharat” or developed India by 2047 and urged the Centre to continue the Special Assistance to States for Capital Investment (SASCI ) scheme, which provides 50 year interest free loans for capital expenditure, according to people aware of the discussions.
At a pre budget meeting on January 10, Union finance minister Nirmala Sitharaman highlighted the role of states in strengthening cooperative federalism and in implementing key reforms, the people said on condition of anonymity. Several states described the SASCI scheme as an effective reform instrument that has helped push capital investment.
The Centre has earlier reiterated its commitment to the programme. Responding to a debate in Parliament, Sitharaman had said the Modi government continued the scheme despite the absence of a recommendation from the Finance Commission. “Even as the Finance Commission did not recommend 50 year interest free loans to states for capital expenditure, Prime Minister Modi did it for states,” she said during the debate on the Pan Masala Cess Bill. “Beyond Finance Commission recommendations, the Centre has also provided Rs 4.24 lakh crore in 50 year interest free loans to states.”
The meeting in New Delhi was chaired by Sitharaman and attended by minister of state for finance Pankaj Chaudhary, along with several chief ministers, deputy chief ministers, the Manipur governor and state finance ministers.
Launched after the Covid 19 pandemic, the SASCI scheme aims to boost economic growth by encouraging states to prioritise capital spending. The total release under the scheme from 2020/21 to December 3, 2025 stands at Rs 4,24,225.95 crore.
(With agency inputs)
