SASCI Capital Investment Scheme: SBI Report on State Absorption
Why in the news
An SBI report on the Scheme for Special Assistance to States for Capital Investment (SASCI) shows that states differ widely in how well they use these central funds. The scheme has supported India’s post-pandemic revival.
Key facts
- Launched: FY 2020-21, in the COVID-19 period, to avoid a slump in infrastructure spending.
- Nature: long-term, interest-free support for building productive assets; a cornerstone of capex-led growth.
- Tenure: 50-year interest-free loans, their defining feature.
Parts of SASCI
| Part | Type | Details |
|---|---|---|
| I | Untied | Shared in line with states’ share of central taxes; usable for any ongoing or new capital project |
| II | Reform-linked | Incentives for urban reforms such as building bylaws and planning, rural land record digitisation with GIS mapping, and ODOP Unity Malls |
| III | Sector-specific | Money for projects like rural Optical Fibre Cable deployment to complement BharatNet |
State performance, FY25
| State | Utilisation |
|---|---|
| West Bengal | 96.7% |
| Maharashtra | 95.0% |
| Chhattisgarh | 94.4% |
| Nagaland | 51.7% |
| Manipur | 47.4% |
Punjab, Kerala and Telangana were described as weaker performers.
Key concepts
- Capex vs revenue spending: capex builds assets such as bridges, hospitals and ports that yield future income and jobs, giving a bigger GDP multiplier than salaries and subsidies.
- Untied funding: money without sector conditions, so states fill their own infrastructure gaps.
- Interest-free long loans keep state debt profiles sustainable.
Exam angle
- Loan tenure: 50 years, interest-free; launched FY 2020-21.
- Top absorber in FY25: West Bengal.
- Related terms: untied funds, capex, multiplier effect, ODOP.