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Informist, Wednesday, Aug 28, 2024

 

By Krity Ambey

 

NEW DELHI – The Centre is likely to facilitate loans of up to 100 bln rupees from multilateral development banks for Bihar for capital investment in 2024-25 (Apr-Mar), two finance ministry officials said. This is in line with Finance Minister Nirmala Sitharaman's announcement on financial assistance for the state in the Budget in July. 

 

The Centre will take the assistance on behalf of Bihar and transfer it to the state, one of the officials told Informist. "The loan will be paid back by the state, and it will also pay a guarantee fee to the central government". 

 

Presenting the full Budget, Sitharaman had said that an additional allocation to support capital investments would be provided to Bihar. The requests of the Bihar government for external assistance from multilateral development banks would be expedited, she added.

 

The state government has to use the funds for capital expenditure, the second official said. It also has to submit a detailed report on the spending, the official added.

 

The support of Janata Dal (United), the ruling party in Bihar, is crucial for the Narendra Modi government at the Centre. In the General Election, the Bharatiya Janata Party failed to get a majority on its own in the Lok Sabha. While Bihar Chief Minister Nitish Kumar had sought special status for the state before the Union Budget, the Centre has not given a special status but announced several infrastructure projects for the state. 

 

Sitharaman had announced a number of development projects in the state, including four road connectivity projects at a cost of 260 bln rupees and a power plant with an outlay of 214 bln rupees. The Centre also announced building new airports, medical colleges and sports infrastructure in Bihar.

 

The government has announced a similar multilateral development assistance worth 150 bln rupees for Andhra Pradesh, a state ruled by another key ally of the BJP government at the Centre.

 

"Recognising the state's (Andhra Pradesh) need for a capital, we will facilitate special financial support through multilateral development agencies," Sitharaman had said in her speech. "In the current financial year, 15,000 crore (150 bln rupees) will be arranged, with additional amounts in future years."  End

 

Edited by Vandana Hingorani

 

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