Special Assistance to States for Capital Investment: FY25 Update
Why in the news
The Centre has cleared nearly all of this year’s funds under the Special Assistance scheme for states, which gives long-tenure loans for capital spending and reforms.
Key facts
- FY25 allocation revised to ₹1.25 trillion from ₹1.5 trillion.
- ₹55,000 crore is distributed by each state’s share in central taxes and duties.
- ₹95,000 crore is reform-linked: iconic tourism destinations, vehicle scrappage incentives, industry and NCR development.
Year-wise allocation
| Year | Allocation | Reform-linked part |
|---|---|---|
| FY21 | ₹12,000 crore | – |
| FY22 | ₹15,000 crore | – |
| FY23 | ₹1.07 trillion | ₹27,000 crore |
| FY24 | ₹1.3 trillion | ₹30,000 crore |
Conditions
- Transparent fund management, as in other Centrally Sponsored Schemes.
- Capex must be additional to state budget spending; land reforms among others.
Significance
- States get fiscal room without immediate debt burden.
- Centre gains more uniform development and structural reforms.
Exam angle
- 50-year interest-free loans to states for capex; started FY21.