Centre approves Rs 1,255 crore capital investment to Arunachal Pradesh

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ITANAGAR: The Union Finance Ministry has approved a capital investment proposal of Rs 1,255 crore to Arunachal Pradesh in the current financial year under the Special Assistance to States for Capital Investment’ scheme for giving a timely boost to capital spending by states. The department of expenditure under the finance ministry has approved a total of Rs 56,415 crore in capital investments for 16 states in the country under the scheme for the current fiscal, an official communiqué informed here. The Centre has approved capital investment projects in diverse sectors, including health, education, irrigation, water supply, power, roads, bridges, and railways. Funds for meeting the state share of the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana have also been provided to the states under this scheme to enhance the pace of the projects in these sectors.

In view of the higher multiplier effect of capital expenditure and in order to provide a boost to capital spending by states, the scheme was announced in the Union Budget 2023–24. Under the scheme, special assistance is being provided to the state governments in the form of a 50-year interest-free loan up to an overall sum of Rs 1.3 lakh crore during the current financial year. The scheme has eight parts, with Part-I being the largest with an allocation of Rs 1 lakh crore. The amount has been allocated amongst states in proportion to their share of central taxes and duties, as per the award of the 15th Finance Commission. Other parts of the scheme are either linked to reforms or are for sector-specific projects. In Part II of the scheme, an amount of Rs 3,000 crore has been set aside for providing incentives to states for scrapping state government vehicles and ambulances, waiver of liabilities on old vehicles, providing tax concessions to individuals for scrapping old vehicles, and setting up automated vehicle testing facilities. Parts III and IV of the scheme aim to provide incentives to states for reforms in urban planning and urban finance. An amount of Rs 15,000 crore is earmarked for urban planning reforms, while an additional Rs 5,000 crore is for incentivizing states to make urban local bodies’ credit worthy and improve their finances.

The scheme also aims at increasing the housing stock for the police personnel and their families within the police stations in urban areas. An amount of Rs 2,000 crore is earmarked for this purpose under Part V of the scheme. Another objective of the scheme is to promote national integration, carry forward the concept of “Make in India” and promote the concept of “One District, One Product (ODOP)” through construction of unity malls in each state. An amount of Rs 5,000 crore has been set aside for this purpose under Part VI of the scheme. Part VII of the scheme, with an allocation of Rs 5,000 crore, is for providing financial assistance to states for setting up libraries with digital infrastructure at panchayat and ward levels for children and adolescents. Among the 16 states, Bihar has the highest allocation with Rs 9640 crore, followed by Madhya Pradesh (Rs 7850 crore), West Bengal (Rs 7523 crore), and Rajasthan with a Rs 6026 crore allocation under the scheme.

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