The Centre has sanctioned about Rs 39,000 crore, or about 50% of the unconditional component of the interest-free 50-year capex loans, to 16 states so far in the current financial year.
Of this, roughly Rs 2,000 crore have been disbursed and the balance will be transferred to the states very soon as states are in the verge of completing project specific preparatory works, sources told FE.
“The sanctions were given early so as to give states time to complete all formalities for release of funds for both ongoing and new projects,” an official told FE.
The beneficiary states so far include Uttar Pradesh, Karnataka, Maharashtra, Bihar, Chattisgarh, Goa, Manipur, Nagaland, Sikkim and Himachal Pradesh, among others. Most of the approvals were for ongoing projects and clearing pending capex bills, as well as some new projects.
The Centre launched an expanded scheme of Rs 1 trillion for FY23 to help states maintain capex, considering a request from states, since the end of the goods and services tax (GST) compensation could have resulted in states junking capex projects in the absence of funds.
Of this, Rs 80,000 crore would be released proportionately to the states’ share in the devolution of central taxes and for projects solely based on their viability. The release of the balance Rs 20,000 crore is linked to infrastructure connectivity projects such as laying of optical fibre cables for last-mile connectivity under BharatNet in rural areas, the state component of the PM Gram Sadak Yojana, projects under the GatiShakti master plan and urban sector reforms.
Of the conditional component disbursement has been so far about Rs 1,000 crore for GatiShakti and optical fibre projects, sources said.
The government was confident that the entire Rs 1 trillion would be fully utilized by states in FY23 in compliance of guidelines issued for availing the grant-like loans for asset creation.
The Centre has budgeted a capex of Rs 7.5 trillion including Rs 1 trillion support to states for FY23, up 27% from the actual spending of Rs 5.93 trillion (up 39% on the year) in FY22.