Team News Riveting
Madhya Pradesh has become the first State to get additional funds for capital projects for successfully carrying out reforms in various citizen-centric areas.
The Department of Expenditure, Ministry of Finance has allocated additional Rs.660 crore to the State for capital expenditure for undertaking the One Nation, One Ration Card Reforms, Ease of Doing Business Reforms, and Urban Local Bodies Reforms. The State has also completed a part of the fourth reform – the Power Sector reform.
A list of capital projects with estimated cost of Rs 660 crore was approved by the Department of Expenditure. 50% of the approved amount (i.e. Rs.330 crore) has also been released to the State as 1st instalment for the approved projects. This amount of Rs.660 crore is in addition to an amount of Rs 660 crore approved earlier for capital projects under Part-II of the scheme.
The scheme of “Special Assistance to States for capital expenditure” was announced by the Finance Minister on 12th October, 2020 as part of Aatma Nirbhar Bharat package. The Scheme is aimed at boosting capital expenditure by the State Governments who are facing difficult financial environment this year due to a shortfall in tax revenue arising from the COVID 19 pandemic.
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.10,657 crore of 27 States have been approved by the Ministry of Finance. An amount of Rs 5,328 crore has already been released to the States as the first instalment under the scheme. State-wise allocation, approval granted and funds released is attached. Tamil Nadu has not availed the benefit of the scheme.
The capital expenditure projects have been approved in diverse sectors of economy like, Health, Rural Development, Water Supply, Irrigation, Power, Transport, Education, Urban Development.
