Special Assistance
Capex loans to states at INR 360.27 bln from Apr 1-Aug 11, says MoS Finance
This story was originally published at 13:43 IST on 18 August 2025
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--Fin min: Gave states INR 360.27 bln as capex loans in FY26 till Aug 11
NEW DELHI – The Centre has released INR 360.27 billion to states till Aug. 11 in 2025-26 (Apr-Mar) as part of the Scheme for Special Assistance to States for Capital Expenditure in the form of 50-year interest-free loans, Minister of State for Finance Pankaj Chaudhary said Monday. In the Union Budget for FY26, the government has earmarked INR 1.50 trillion for the flagship scheme.
The allocation of loans for states is part of the government's total capital expenditure target of INR 11.21 trillion for FY26. "Under some parts of the scheme, incentive is provided to states for carrying out reforms in different sectors," Chaudhary said in a written reply to a question raised in the Lok Sabha.
The finance ministry has issued guidelines for the release of INR 1.40 trillion of the total INR 1.50 trillion of the 50-year interest-free loans to states and Union territories. Of these, loans worth INR 570 billion, or 38%, will be "untied". Of the "tied" or conditional part, the government has issued modalities for the release of INR 830 billion, Informist had reported in April.
First launched in the Budget for FY22, the scheme for special assistance to states to carry out capital investment is in line with the Narendra Modi government's thrust on capital expenditure to drive economic growth. In the past five years, the government has increased the Centre's capital expenditure by more than three times. In FY25, the government ended up releasing just short of INR 1.50 trillion to states for capex loans, much higher than the revised estimate of INR 1.25 trillion and close to the original target set by the government. End
Reported by Priyasmita Dutta
Edited by Subhojit Sarkar
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