States back ‘Viksit Bharat’ in FM Sitharaman’s pre-budget meeting

ALegal age of states on sabbatum supported the unification authorities’s rectify agenda aimed at the goal of “Viksit Bharat” (developed India) by 2047 and urged the Centre to continue the Special Assistance to States for Capital Investment (SASCI) scheme, which offers 50-year interest-free loans for capital expenditure, people aware of the matter said.At a pre-budget meeting, Union finance minister Nirmala Sitharaman underscored states’ role in strengthening cooperative federalism and implementing the government’s reform agenda, they added, requesting anonymity. States described the SASCI scheme as an effective reform tool, the people said.The Centre has previously indicated strong support for the initiative. Replying to a debate in Parliament recently, Sitharaman noted that the Modi government continued the SASCI scheme to incentivise reforms despite the lack of a specific recommendation to the effect from the Finance Commission.“Even as the Finance Commission did not recommend 50-year interest-free loans to states for capital expenditure, Prime Minister Modi did it for states,” she said during a debate on the Pan Masala Cess Bill. “Beyond Finance Commission recommendations, the Centre has also provided ₹4.24 lakh crore in 50-year interest-free loans to states.”The Saturday meeting in New Delhi was chaired by Sitharaman and attended by minister of state for finance Pankaj Chaudhary.Participants included the chief ministers of Delhi, Goa, Haryana, Jammu and Kashmir, Meghalaya and Sikkim, the deputy chief ministers of Arunachal Pradesh, Madhya Pradesh, Odisha, Rajasthan and Telangana, the Manipur governor, and state finance ministers.The SASCI scheme was launched after the Covid-19 pandemic to boost the economy by nudging states towards capital investments.Minister of state Chaudhary told the Rajya Sabha on December 9 that the total amount released under SASCI from 2020-21 to 2025-26 (till December 3, 2025) was ₹4,24,225.95 crore.The scheme started with a corpus of ₹12,000 crore in 2020-21. As it became a hit among states, the Centre raised the amount to ₹1.07 lakh crore in 2022-23. The budget estimate (BE) was raised to ₹1.30 lakh crore in 2023-24, though actual expenditure was ₹1,09,554.30 crore.For the current financial year (2025-26), the corpus has been raised to ₹1.50 lakh crore, despite capacity issues in certain states and a reduction in the previous year’s revised estimates.