The Ministry of Finance today announced further monetary help of Rs 1,004 crore for Madhya Pradesh and Andhra Pradesh. Both states received further funds just after finishing 3 out of the 4 citizen-centric reforms stipulated by the government. The two states have completed the One Nation, One Ration Card reforms, Ease of Doing Business reforms, and Urban Local Bodies reforms. While Andhra Pradesh will get an further quantity of Rs 344 crore, Madhya Pradesh will get Rs 660 crore for capital projects.
It is to be noted that below Prime Minister Narendra Modi’s flagship Atmanirbhar Bharat package, the scheme for ‘Special Assistance to States for Capital Expenditure’ was announced. This is in addition to the permission of Rs 14,694 crore issued to the states for additional borrowings for finishing the reforms.
The scheme is aimed at boosting capital expenditure by the state governments, who are facing a complicated monetary atmosphere this year due to the shortfall in tax income amid the pandemic. Since capital expenditure has a larger multiplier impact and it enhances the future productive capacity of the economy, the government had decided to extend the scheme in spite of the adverse monetary position of the Centre.
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So far capital expenditure proposals of Rs 9,880 crore of 27 States have been authorized by the finance ministry and an quantity of Rs 4,940 crore has currently been released to the states as the 1st installment below the Scheme. The capital expenditure projects have been authorized in diverse sectors of the economy such as wellness, rural Development, water Supply, irrigation, energy, transport, education, and urban improvement.
Meanwhile, Andhra Pradesh, Goa, Haryana, Karnataka, Kerala, Telangana, Tripura, and Uttar Pradesh are the states that had effectively rolled out the PDS reform. On completion of reforms, further borrowing permission of Rs 23,523 crore had been issued to these states.