The Centre on Saturday said that all states except Tamil Nadu have availed benefits of “Special Assistance to States for Capital Expenditure”.
The scheme is aimed at boosting capital expenditure by the state governments, who are facing a difficult financial environment this year due to the shortfall in tax revenue arising from the Covid-19 pandemic.
According to the Ministry of Finance, capital expenditure has a higher multiplier effect, enhancing the future productive capacity of the economy, and results in a higher rate of economy growth.
“Therefore, despite the adverse financial position of the central government, it was decided to extend a special assistance to the state governments in respect of capital expenditure, in financial year 2020-21,”
“The scheme has got very warm response from the state governments. So far capital expenditure proposals of Rs 9,879.61 crore of 27 States have been approved by the Ministry of Finance.”
As per the statement, an amount of Rs 4,939.81 crore has already been released to the states as the first instalment under the scheme.
