Govt. has released 75% of interest-free loans meant for states: Pankaj Chaudhary

livemint.com:

NEW DELHI : The government has released about Rs60,104 crore in interest-free, capital expenditure loans to states, out of the Rs80,000 crore earmarked for this fiscal year, minister of state for finance Pankaj Chaudhary informed the Lok Sabha on Monday. The loans fall under a Union government scheme called ‘Special Assistance to States for Capital Investment’, which was introduced during the early days of the Covid-19 outbreak.

Responding to questions from parliamentarians Gajanan Kirtikar and Krupal Balaji Tumane, Chaudhary said the government had disbursed ₹60,104 crore to 24 states as of 6 December. Andhra Pradesh, Kerala, Manipur, and Punjab were not eligible for the loans, he added, as these states didn’t meet specific reform conditions.

Mint reported in August that the scheme would have strings attached as the government sought to nudge states to implement specific reforms. In FY2023, the government had disbursed Rs81,195.35 crore to 28 states under the scheme, significantly higher than the Rs11,830.29 crore and Rs14,185.78 crore disbursed in FY2021 and FY2022, respectively.

So far in FY2024, Uttar Pradesh has received the highest monetary assistance under the scheme (Rs12,458.43 crore), followed by Bihar (Rs6,135.54 crore), Madhya Pradesh (Rs5,325.60 crore), West Bengal (Rs5,015.58 crore), Rajasthan (Rs3,987.91 crore), Maharashtra (Rs3,457.61 crore), Odisha (Rs3,039.77 crore), and Assam (Rs2,841.21crore). A senior government official had earlier told Mint that states needed to ensure that they would use the interest-free loans to supplement their capital expenditure and not as a substitute for it.