Lok Sabha Question No. 5254 (UNSTARRED), answered on 2023-04-03
Subject: Capital and Development Expenditure by States
Ministry: FINANCE
Asked by: Anil Firojiya

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION No. †5254

TO BE ANSWERED ON MONDAY, APRIL 03, 2023/CHAITRA 13, 1945 (SAKA)

## CAPITAL AND DEVELOPMENT EXPENDITURE BY STATES

## †5254. SHRI ANIL FIROJIYA

Will the Minister of FINANCE be pleased to state:

- (a) the  details  of  the  action  taken/being  taken  by  the  Government  to  accelerate  the capital and developmental expenditure by the States and to give them comprehensive support in this regard; and
- (b) the details of the Sovereign Gold Bond Scheme and the manner in which it is likely to benefit the general public?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a):  The  Union  Government  had  launched  'Scheme  for  Special  Assistance  to  States  for Capital  Expenditure'  in  the  financial  year  2020-21,  under  which  financial  assistance  was provided to the State Governments in the form of 50-year interest free loan. An amount of Rs. 12,000 crore was allocated for the scheme for the financial year 2020-21, and the States had availed financial assistance in the form of 50-year interest free loan amounting to Rs. 11,830 crore. In view of the positive response to the scheme and considering the requests of the State Governments, the Union Government had extended the scheme in the year 2021-22 with an allocation of Rs. 15,000 crore. Out of the allocation of Rs. 15,000 crore, financial assistance in the form of 50-year interest free loan amounting to Rs. 14,186 crore was provided to the States.

In the financial year 2022-23 too, the Department of Expenditure, Ministry of Finance is  implementing  the  'Scheme for Special Assistance to States for Capital Investment' with budget  outlay  of  Rs.  1.0  lakh  crore.  Out  of  the  total  allocation,  Rs.  80,000  crore  (untied) under  Part-I  and  Rs.  4,997  crore  under  Part-II  of  the  Scheme  (PM  Gati  Shakti  related expenditure) have been allocated to States in proportion to their share of Tax Devolution for 2022-23.  The  rest  of  the  amount  is  available  to  States  based  on  meeting  certain  reform criteria. In case of Part-IV (Incentives for Digitization), Part-V (Optical Fibre Cable), Part-VI

(Urban  Reforms)  and  Part-VIII  (Incentives  for  Scrapping  Old  Vehicles),  States  have  been divided into groups with different ceiling for maximum amount admissible on completion of reforms. Capital investment of Rs. 93,497.83 crore has been approved under the scheme and an amount of Rs.79,017.57 crore has been released to the States till 29.03.2023.

(b): Sovereign Gold Bonds (SGBs) scheme was introduced by the Government in November, 2015 with the broad objectives to reduce demand for physical gold, shift part of investments being  made  every  year  in  physical  gold  to  'demat'  gold.  The  SGBs  are  issued  in denomination of one gram of gold or multiple thereof. The minimum limit of subscription for the bond issued is one gram and maximum limit of subscription per fiscal year is of four kg for individuals, four kg for Hindu Undivided Family (HUF) and 20 kg for trust and similar entities notified by the government from time to time. Interest is paid to investors at the rate of 2.5% per annum on nominal value of the bond. The tenor of the SGBs is 8 years; however, premature  redemption  of  the  bonds  is  permitted  after  fifth  year  from  date  of  issue  of  the bonds. SGBs provide many advantages to the investors over the investment in physical gold like no storage cost, interest over and above the capital appreciation equal to gold in market, investment as low as one gram, upfront discount to the investors etc.

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