Centre's interest-free capex loans to states cross ₹30,000 cr
New Delhi: The Centre’s disbursal of 50-year interest-free capital expenditure loans to states has more than doubled year-on-year to around ₹30,000 crore so far in the current fiscal, The Financial Times reported, citing a senior government official.
Sanctions under the scheme had reached ₹40,000 crore as of last week, against a budgeted outlay of ₹1.5 lakh crore for all states in FY26.
Of the ₹1.5 lakh crore target for the year, the Centre has already issued guidelines covering ₹1.39 lakh crore.
The remaining ₹11,000 crore is expected to be tied to ease of doing business metrics, with corresponding norms to be announced shortly.
Two-thirds of the capex loans earmarked for FY26 are linked to governance and financial sector reforms.
These include creation of municipal cadres, finance-related initiatives such as an integrated property tax portal, and urban land and planning improvements.
States are also expected to show growth in their own capital spending and execute specified urban and rural infrastructure projects.
Launched during the pandemic with an allocation of ₹12,000 crore in FY21, the Scheme for Special Assistance to States for Capital Investment (SASCI) has grown into a major policy tool.
It now provides ₹1.5 lakh crore in capex support, encouraging states to undertake key reforms.
Of the ₹1.49 lakh crore released in FY25, nearly half was tied to reforms or specific project execution.
Officials expressed confidence that the FY26 capex loan target would be met, citing greater preparedness among states to utilise the scheme.
For the first time, the Centre has allocated ₹6,000 crore as incentives for states to develop digital public infrastructure for agriculture.
This includes creating and integrating farmers’ registries with land records and digitising crop enumeration through the digital crop survey programme.
An additional ₹6,000 crore has been earmarked to promote efficient fund management through the onboarding of 29 centrally sponsored schemes onto the SNA SPARSH platform, ensuring ‘just-in-time’ fund releases.
States must also implement Aadhaar-based direct benefit transfer (DBT) payment systems via the RBI and NPCI under all DBT-linked schemes.
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