Industry Odisha Bureau, Oct 14: The Centre has released about ₹51,000 crore of a ₹2 lakh crore capex loan scheme. State spending lags further behind. The Department of Expenditure is now chasing paperwork and faster approvals.
The Department of Expenditure has asked states to expedite use of interest-free capex loans. The loans fall under a ₹2 lakh crore programme for state capital investment. By October 1, the Centre had released about ₹51,000 crore.
That equals roughly 26% of the funds allocated for the year. Actual spending by states remains lower still, officials said. The gap has raised concern that state-level capital investment could lose momentum.
The programme is the Scheme for Special Assistance to States for Capital Investment, or SASCI. The Centre has also sanctioned loans worth about ₹67,000 crore. Sanctions are approvals, while releases are money actually transferred to states.
The four figures measure different stages of the same pipeline. The allocation sets the ceiling, and sanctions approve specific loans. Releases move cash, while utilisation shows money spent on projects. Only utilisation reflects roads, utilities and other assets taking shape.
The department wrote to states during the first week of October. Several states had not drawn available funds, officials said. Others had yet to submit utilisation certificates.
These certificates show how earlier funds were spent. They support accountability and can shape further releases. Officials have been told to contact states and speed up approvals. The department is also helping states identify suitable projects and secure faster clearances.
Releases had reached about ₹44,500 crore by July. Only around ₹6,500 crore more followed by October 1. A senior official, who asked not to be named, said spending slowed after July. The official described this year’s SASCI budget as generous.
Officials expect states to absorb the full allocation in the second half. That outcome, however, is not assured. Squeezing large spending into fewer months can strain planning and execution.
Introduced in FY22, SASCI offers states 50-year loans at zero interest. Such long-term financing spares states the cost of market borrowing. It also gives them room to plan multi-year infrastructure projects. State spending complements the Union government’s own public investment push.
Not all the money is equally easy to access. An untied component of ₹75,000 crore makes up 37.5% of the total. It is distributed largely according to states’ shares in central taxes. The rest depends on reforms and conditions that states can choose to adopt.
The scheme sets aside ₹25,000 crore to reward states meeting capex targets. Another ₹25,000 crore supports nine hilly states facing difficult terrain and fiscal constraints. Mountain regions often face higher construction costs and slower project delivery.
Smaller reform-linked pools cover organic district rollout at ₹13,000 crore. Mining reforms and financial management reforms receive ₹5,000 crore each. Right of Way rules carry ₹4,000 crore, and fiscal discipline ₹3,000 crore.
The scheme’s value depends on turning available funds into completed public works. Faster releases alone will not guarantee faster construction. Project readiness, quick approvals and close Centre-state coordination will decide the outcome.
