The central government has disbursed approximately Rs 1.11 trillion to states between April and January under its interest-free, 50-year special assistance scheme for capital expenditure, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha on Monday. 

Chaudhary stated that loans worth Rs 1.22 trillion had been approved as of January 31, with Rs 1.11 trillion already released. Of the total Rs 1.5 trillion allocation, Rs 550 billion under Part-I of the scheme remains untied and has been distributed based on each state’s share of central taxes as determined by the 15th Finance Commission. 

The remaining Rs 950 billion is designated for reforms in key citizen-centric areas and sector-specific projects, including the development of globally iconic tourist destinations, incentives for scrapping old vehicles, and initiatives to boost industrial growth. 

In the revised estimate for 2024-25, the Centre has reduced the outlay to Rs 1.25 trillion, as some states may not receive the full amount of tied loans due to non-compliance with required conditions. 

(Financial Express)