NEW DELHI: Digital public infrastructure for agriculture, efficiency in financial management, urban planning and land-related reforms are among the conditions for states to qualify for tied component of 50-year interest-free capex loans from the centre. A total of Rs 52,000 crore is earmarked for release to states if the conditions are met, while the overall size of the capex loan for 2025-26 is Rs 1.5 lakh crore.
This is in addition to guidelines issued with regard to Rs 87,000 crore worth of loans, including Rs 57,000 crore untied loans for states’ priority projects and Rs 30,000 crore linked to reforms or projects.
According to the latest guidelines covering Rs 52,000 crore soft loans to states, Rs 13,000 crore has been earmarked for governance reforms like building municipal cadres, finance reforms, including integrated property tax portal and urban land and planning reforms. This component will incentivise for filling and creation of new posts for improving service delivery including sanction of posts for environmental engineers and hydrologist. States will also be incentivised if municipal revenues increase 10% on from other sources like advertising, parking and renting.
Even though the capex support scheme of the Centre has been running for the six year in arow, the Centre for the first time allocated Rs 6,000 crore as incentive to states for digital public infrastructure for agriculture including farmers registry and digital crop survey. The states would have to adopt digital systems for development and maintenance of the state’s farmers’ registry to the state’s land record system and to digitise and standardise crop enumeration process using the digital crop survey programme.
To encourage efficiency in financial management, an amount of Rs 6,000 crore has been allocated to incentivise the states for onboarding 29 centrally sponsored schemes in the SNA SPARSH platform for the ‘just-in-time’ release of funds mechanism to curb floating of funds. The states would also be required to operationalise Aadhar based direct benefit transfer (DBT) payment mechanism with RBI and NPCI under all DBT schemes.
The Centre has also allocated Rs 5,000 crore each for the digitisation of rural land records, urban land-related reforms and deregulation for ease of doing business in FY26. Land reforms have been a major thrust of the Centre under the capex scheme to make it easier for manufacturing and agriculture prosper to make India a developed nation. For compliance reduction and deregulation for ease of doing business, states are required to make mixed-use land development flexible, digitise process of land use change, rationalise road width requirements for industries and amend building regulations to reduce land loss, etc.
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.
Source: The Financial Express
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