Atma Nirbhar Bharat: 27 states use investment loans worth Rs 9,880 crore
All 27 states except Tamil Nadu have benefited from the newly announced program of Special State Assistance for Capital Expenditure under the government’s Atma Nirbhar Bharat Abhiyan program. Finance Minister Nirmala Sitharaman announced the project on October 12.
The scheme aims to increase capital spending in states facing a difficult financial crisis due to the fiscal shortfall in the wake of the COVID 19 pandemic. The center has extended special assistance to states with regard to spending in capital during the financial year 21.
So far, capital expenditure proposals of Rs 9,879.61 crore from 27 states have been approved by the Ministry of Finance, of which over Rs 4,939.81 crore has already been remitted to the states as First payment.
Capital expenditure projects have been approved in various sectors of the economy such as health, rural development, water supply, irrigation, electricity, transport, education and urban development.
The scheme has three parts. The first part covers the northeast region, under which Rs 200 crore has been allocated to seven northeastern states, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura. Assam has been allocated Rs 450 crore as part of the program.
Part II states include states not included in Part I, under which over Rs 7,500 crore has been allocated. The amount was distributed among these states in proportion to their central tax share in accordance with the provisional allocation of the 15th Finance Committee for 2020-2021.
Part III aims to promote various citizen-centered reforms in states. Under this, Rs 2,000 crore is set aside for states that implement at least three of the four reforms specified by the Ministry of Finance on May 17 with respect to additional reform-related borrowing authorizations. The 4 reforms are – a nation a ration card, the ease of doing business reform, the reform of urban local bodies / utilities and the reform of the electricity sector.
Notably, capital spending has a higher multiplier effect, improving the future productive capacity of the economy and resulting in a higher rate of economic growth.