Till November 7, the Centre had sanctioned Rs 1.1 trillion or 85% of the capex loans facility, more than half of which was already disbursed.
Going by the trends so far, states are likely to be able to utilise around Rs 1 trillion from the Centre’s Rs 1.3 trillion 50-year interest-free capex loans facility for the current financial year.
Till November 7, the Centre had sanctioned Rs 1.1 trillion or 85% of the capex loans facility, more than half of which was already disbursed. Of the total outlay of Rs 1.3 trillion for capex loans to states in FY24, the tied component is Rs 0.3 trillion.
Due to paucity of time owing to a clutch of state elections by end-2023, the Centre had relaxed the norms to release two-thirds of the untied loans amounting to Rs 0.67 trillion in the first instalment itself instead of the earlier plan to release one-third or Rs 0.33 trillion in the first instalment.
The second/last instalment release of Rs 0.33 trillion would depend on states’ achieving 45% of their annual capex target (excluding central loans) by September and submitting utilisation certificates for 75% of the funds released to them in the first instalment.
However, states requested the Centre to give some more time as their capex is usually around 30% in H1. So, the Centre extended the timeline for states to achieve 45% of their target by October.
“So far, 3-4 states have approached for the second instalment after meeting the target. Other states which have met the 45% target are expected to file for the second instalment next month,” a senior official said.
While Andhra Pradesh has not been eligible for funds under the capex scheme (untied funds) for not meeting fiduciary conditions such as branding norms of central schemes, some states like Karnataka are lagging behind in capex. Punjab has achieved only 14% of its annual capex target in H1 while Karnataka has achieved just 17% during the period.
“Overall, we want the states to utilise the facility fully in FY24, but no more extension will be given to meet 45% of their capex target,” the official said, adding that states will certainly utilise around Rs 1 trillion in FY24.
Source:financialexpress.com