Meghalaya was among all states except Tamil Nadu that have availed benefits of “Special Assistance to States for Capital Expenditure” from the Central government.
The scheme is aimed at boosting capital expenditure by the state governments that are facing a difficult financial environment this year due to the shortfall in tax revenue arising from the Covid-19 pandemic.
Under the first installment of the scheme, Meghalaya has received Rs 100 crore out of the total approved amount of Rs 200 crore.
According to the Ministry of Finance, capital expenditure has a higher multiplier effect, enhancing the future productive capacity of the economy, and results in a higher rate of economy growth.
“Therefore, 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 financial year 2020-21.The scheme has got very warm response from the state governments. So far capital expenditure proposals of Rs 9,879.61 crore of 27 States have been approved by the Ministry of Finance,” it said.
As per the statement, an amount of Rs 4,939.81 crore has already been released to the states as the first installment under the scheme.
The scheme has three parts. The first part of the scheme covers the north-eastern region. Under this part, Rs 200 crores is allocated to seven north-eastern states (Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura). In view of higher population and geographical area, Assam has been allocated Rs.450 crores under the scheme.
The second part of the scheme is for all other states not included in the first part. An amount of Rs.7,500 crores is earmarked for this part.
In addition, the third part of the scheme is aimed at pushing various citizen-centric reforms in the states.
“Under this part, an amount of Rs 2,000 crores is earmarked. This amount will be available only to those states who carry out at least three out of the four reforms specified by the Ministry of Finance in its letter dated 17th May, 2020 regarding reform linked additional borrowing permissions,” the Finance Ministry said.
Accordingly, the four reforms are – ‘One Nation One Ration Card’, Ease of Doing Business Reform, Urban Local Body or Utility Reform and Power Sector Reform.