States will get 1 lakh crore interest-free loan for fifty year
The scheme for financial assistance to states for capital investment has been extremely well received by the states, Nirmala Sitharaman said in the budget speech
In the budget 2022, the Union Finance Minister has proposed 1 lakh crore financial assistance to the states, this will be a fifty-year interest-free loan.
The scheme for financial assistance to states for capital investment has been extremely well received by the states, she said in the budget speech. The interest-free loans are over and above the normal borrowings allowed to states.
During her meeting with Chief Ministers and State Finance Ministers, the outlay for this scheme is being enhanced from 10,000 crore in the budget estimated to 15,000 crore in the revised estimates for the current year, said Union Finance Minister.
This allocation will be used for PM GatiShakti related and other productive capital investments of the states. It will also include components for Supplemental funding for priority segments of PM Gram Sadak Yojana, including support for the states’ share, digitalisation of the economy, including digital payments and completion of OFC network, and reforms related to building bye-laws, town planning schemes, transit-oriented development, and transferable development rights.
In 2022-23, in accordance with the recommendations of the 15th the Finance Commission, the states will be allowed a fiscal deficit of 4 percent of GSDP of which 0.5 per cent will be tied to power sector reforms, for which the conditions have already been communicated in 2021-22.