NEW DELHI: PM Modi Granted additional financial assistance of Rs 344 crore to Andhra Pradesh for capital expenditure on completion of three out of the four citizen-centric reforms.

As per a release from the Ministry of Finance on Wednesday, the States of Andhra Pradesh and Madhya Pradesh were provided additional additional financial assistance amounting to Rs 1,004 crore under the newly launched Scheme of Special Assistance to States for Capital Expenditure.

The two states have completed the One Nation, One Ration Card Reforms, Ease of Doing Business Reforms, and Urban Local Bodies Reforms. Consequent upon completion of reforms in the three sectors, the Department of Expenditure, Ministry of Finance has decided to provide additional financial assistance.

Andhra Pradesh will get an additional amount of Rs 344 crore while Madhya Pradesh will receive Rs 660 crore for capital projects, it said, adding they have become the first group of states to complete three out of the four citizen centric reforms.

The government had announced that the centre will offer Rs 12,000 crore special interest-free 50-year loan to states, exclusively for capital expenditure as part of AatmaNirbhar Bharat Package 2.0 announced in October last year. The additional financial assistance for the capital expenditure is in addition to the permission of Rs 14,694 crore issued to these states for extra borrowings for completing the reforms.

The scheme of ‘Special Assistance to States for Capital Expenditure’ is aimed at boosting capital expenditure by the state governments who are facing a difficult financial environment this year due to the shortfall in tax revenue arising from the COVID 19 pandemic. 

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 the financial year 2020-21.

The capital expenditure projects have been approved in diverse sectors of economy like, health, rural development, water supply, irrigation, power, transport, education, urban development.

This amount has been allocated amongst these states in proportion to their share of central tax as per the interim award of the 15th Finance Commission for the year 2020-21.

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