Rs 60,000 Crore Capital Expenditure (Capex) Approved to States

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Rs 60,000 Crore Capital Expenditure (Capex) Approved to States

  • Recently, the central government has approved capital expenditure (Capex) of Rs 60,000 crore to the states.
  • It is a long term capital expenditure fund for the states. It has been released under the “Special Assistance to States for Capital Investment Scheme for the year 2022-23”.
  • It is a modified form of the ‘Scheme of Special Assistance to States for Capital Expenditure’. This scheme was launched in the year 2020-21 after the Kovid-19 pandemic.

Salient Features of the Revised Scheme

  • Rs 1 lakh crore has been allocated for the year 2022-23.
  • Out of the above amount, Rs 80,000 crore is based on the 15th Finance Commission formula. The remaining Rs 20,000 crore pertains to reform measures.
  • This amount is being given as assistance in the form of interest free loan for 50 years. This is in addition to the normal borrowing limits approved for the States.

The plan has 7 parts:

  • For capital works (PM Gati Shakti Master Plan will get priority); Expenditure relating to PM Gati Shakti; Pradhan Mantri Gram Sadak Yojana; encouragement for digitization; optical fiber cables; urban improvement; Disinvestment and Monetization.
  • Funds awarded will be used for new and ongoing capital projects.
  • Projects with an outlay of less than Rs.5 crore (Rs.2 crore for North Eastern States) and repair and maintenance projects will not be covered under the scheme.
  • Capital expenditure refers to the outlay of government money in the form of investment or development expenditure for the creation of assets for the long term.
  • It also includes repayment of debt as it reduces the liability of the government.

Importance of Capital Expenditure:

  • It generates revenue, it creates demand in the economy, it attracts private investment, it sustains economic growth etc.

Source – The Hindu

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