Norms for release of capex to states eased

THE CENTRE HAS relaxed a clutch of norms regarding the release of interest-free capex loans to the state governments to ensure that the entire sum of ₹1.5 lakh crore earmarked for 2024-25 is fully utilised during the year, and help arrest a decline in public capex.

- PRASANTA SAHU

The move is aimed at minimising a likely shortfall in actual budgetary capital expenditure from the budgeted level of ₹11.1 lakh crore. By November end, ₹5.13 lakh crore of the capex budget for the year was spent, which was down 12.3% on year.

"We will achieve 100% of the target set for the capex loans to states in the current financial year," a senior official said. Around ₹90,000 crore or two-thirds of the annual outlay loans have already been released. Despite an early start in the previous fiscal, the Centre could release only ₹61,500 crore in April-December of FY24. The acceleration this time around assumes importance as the roll-out was staggered and delayed this fiscal due to general elections and the full Budget in July.

Of the grant-like loans earmarked for FY25, ₹95,000 crore is linked to reforms and other criteria specified by the Centre for states including capex, efforts to stimulate industrial growth, assistance for completion of major infra projects, urban and rural land reforms etc.