Finance minister Nirmala Sitharaman on Thursday said she expects states to start submitting proposals for the 50-year interest-free loan from April itself and their response to the scheme this year “hasn’t been disheartening”.
The government has kept Rs 1.3 trillion for the scheme for next fiscal.
“This year, we have been talking with chief secretaries of state governments to say this moves fast and moves early. My strong belief is that in the month of April, there will be a substantial number of proposals from many states, so the release can happen straight away,” she said at a post-Budget interaction with FICCI.
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The minister said a lot of discussion on the scheme has already taken place and differences have been ironed out. “Unlike last year, this year it will start rolling out faster,” she said.
The minister was responding to a question on the slow spending by states using the loan this year that had been referred to in the Economic Survey.
The Union Budget 2023-24 has proposed to continue the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivise them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 trillion from Rs 1 trillion this fiscal.
Sitharaman said the launch of the scheme was delayed this year as states had to come up with proposals and then to set them rolling. The scheme has been extended to 2023-24 and the allocation was increased as the Centre felt there was good appetite for more funds and continuation of the scheme. “That’s not possible if they didn’t absorb it last year,” the minister noted.
Meanwhile, stressing that recovery has to be broad based and not for only one sector or company, she also asked corporates to ensure that payments to MSMEs are not held up.
“We want speedier recovery… Recovery cannot be any sector or big or small company’s prerogative. India has to recover,” she said while underlining that dues of MSMEs must be paid within the specified timelimits by companies as well as government departments, enterprises and agencies.
She was responding to a question on how the 45-day payment deadline for MSMEs will be implemented. In order to support MSMEs in timely receipt of payments, the Union Budget has proposed to allow deduction for expenditure incurred on payments made to them only when payment is actually made.
“The government’s intent is clearly mentioned, not once but twice. Those who have not paid MSMEs may not claim any offsets that year. Pay the MSME,” she underlined.
The minister also asked India Inc to take the lead in the sector of renewables and rare earth minerals that can be converted to usable technology.
“Industry should look at its own potential and then come up with points at which the government should facilitate. You start it off,” she said, adding that the ball is in their court.
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Referring to the development of the software industry, she said that the industry took the lead in the sector and the government then followed it up with policies.
“That is the expectation from industry, even when it is comes to the second stage of green energy…rare materials, hydrogen, ways and means green ammonia can be converted,” she said.