The Centre’s 50-year interest-free loans for capital expenditure by the states reached Rs 56,826 crore so far in the current financial year, the finance ministry informed Parliament.
How do states rank?
The largest recipient of the interest-free capital expenditure loan so far this year is Uttar Pradesh, which has received about ₹8,465 crore to support a wide range of 482 approved projects across sectors. Following it is Assam, which has obtained roughly ₹5,042 crore for 229 projects, reflecting its strong utilisation of the scheme for infrastructure and development-led interventions. In the third position is Rajasthan, with around ₹4,113 crore released for 183 projects, indicating steady momentum in capital investment through the SASCI window.
Next comes Bihar, which has received about ₹3,952 crore covering 144 projects, highlighting continued emphasis on expanding physical and social infrastructure. Madhya Pradesh has secured approximately ₹3,810 crore for 53 projects, placing it among the major beneficiaries of the Union government’s push for state-led capital formation.
Government earmarks Rs. 1.5 lakh crores
The Government has earmarked Rs. 1.5 lakh crores in the budget for 2025-26 as capex loan to states.
The Scheme for Special Assistance to States for Capital Investment (SASCI) has evolved from an initial Rs 12,000 crore in 2020-21 (during Covid-19) to Rs 1,50,000 crore in 2024-25, making the SASCI into a policy lever that incentivises critical reforms across states. Of the Rs 1,49,484 crore capex loans released to the states in FY25, half of that was for reforms or project linked as outlined in the scheme.
