States should leverage opportunities to scale up investments and growth: Nirmala Sitharaman

In an interaction with Chief Ministers and Finance Ministers of all states and Lt Governors of UTs via virtual conference, Sitharaman said the Centre has taken "concrete steps" to increase capital spending and drive infrastructure and investment-led growth. 

"Benefits of higher investment in Infrastructure manifest in form of increased employment opportunities, access to market and materials, improved quality of life and empowerment of vulnerable sections," she said.

Union Budget FY 2021-22 has allocated Rs 5.54 lakh crore capital outlay, an increase of 34.5% over last year.  Additionally, around Rs 2 lakh crore allocation is for states and autonomous bodies for their capital expenditure, Sitharaman informed. 

"Over and above this, a new incentive scheme was launched by GoI for states that could achieve at least 15 % of the target set for FY21-22 by the end of 1st quarter, 45% by end of 2nd quarter, 70 % by the end of 3rd quarter," she said.

States that achieve their targets become eligible for incremental borrowing. After the end of 1st quarter, 11 states got permission to mobilise an additional total amount of Rs 15,271 crore

Sitharaman further said that the recently launched National Monetization Pipeline includes only Central government assets and State assets have been out of its purview as of now.

She suggested that there is a significant potentially monetizable asset base in states which could be leveraged to enhance the capital available for new infrastructure creation and other social sector pressing priorities.

The Finance Minister urged states to help India become the fastest growing economy in coming years, through facilitating investment attractiveness and expediting ease of doing business measures and undertaking power reforms with regards to reduction in AT&C and ACS-RRR.

She also emphasized that since in many cases land is one of the major bottlenecks for project on-grounding, states must contrive to smoothen land acquisition procedures and create land banks to be tapped at the time of investment.