New Delhi: Union Finance Minister Nirmala Sitharaman on Monday announced in her Budget Speech that Rs. 1 lakh crore has been allocated to assist the States in catalyzing overall investments in the economy for the year 2022-23.
The outlay for the ‘Scheme for Financial Assistance to States for Capital Investment’ is being enhanced from Rs 10,000 crore in Budget Estimates for 2021-22 to Rs 15,000 crore in Revised Estimates, she said while presenting the Union Budget in Parliament today.
She proposed to allocate Rs 1 lakh crore to assist the states in catalysing overall investments in the economy for 2022-23. These fifty-year interest free loans are over and above the normal borrowings allowed to the states, she said.
This allocation will be used for PM Gati Shakti related and other productive capital investment of the States, including components for supplemental funding for priority segments of PM Gram Sadak Yojana, including support for the States’ share.
It will also be allocated for digitization of the economy, including digital payments and completion of OFC network, and reforms related to building byelaws, town planning schemes, transit-oriented development, and transferable development rights, she informed.
The Finance Minister announced that in 2022-23, in accordance with the recommendations of the 15th Finance Commission, the States will be allowed a fiscal deficit of 4% of GSDP of which 0.5% will be tied to power sector reforms, for which the conditions have already been communicated in 2021-22.
She further said that the Central Government is committed to bolstering the hands of the States in enhancing their capital investment towards creating productive assets and generating remunerative employment.