MP, AP first states to win rewards of reforms

They get additional financial assistance of Rs 1,004 crore for capital expenditure

GN Bureau | January 6, 2021


#One Nation One Ration Card reforms   #Ease of Doing Business   #Urban Local Bodies   #Madhya Pradesh   #Andhra Pradesh   #Finance Ministry   #Aatma Nirbhar Bharat   #Nirmala Sitharaman  
Finance minister Nirmala Sitharaman (File photo)
Finance minister Nirmala Sitharaman (File photo)

Madhya Pradesh and Andhra Pradesh have become the first group of states to complete three out of the four citizen-centric reforms stipulated by the department of expenditure, ministry of finance. The two states have completed the One Nation, One Ration Card reforms, Ease of Doing Business reforms, and Urban Local Bodies reforms.

Consequent upon completion of reforms in the three sectors, the department of expenditure, ministry of finance, has decided to provide additional financial assistance amounting to Rs. 1,004 crore to these States under the newly launched scheme of Special Assistance to States for Capital Expenditure.

Andhra Pradesh will get an additional amount of Rs.344 crore while Madhya Pradesh has become entitled to receive Rs.660 crore for capital projects. The scheme was announced by finance minister Nirmala Sitharaman on October, 12 as part of Aatma Nirbhar Bharat package. The additional financial assistance for the capital expenditure is in addition to the permission of Rs.14,694 crore issued to these States for extra borrowings for completing the reforms.

The scheme of Special Assistance to States for Capital Expenditure is aimed at boosting capital expenditure by the state governments who are facing difficult financial environment this year due to the shortfall in tax revenue arising from the Covid-19 pandemic. 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. 9,880 crore of 27 states have been approved by the ministry of finance. An amount of Rs. 4,940 crore has already been released to the states as the first instalment under the scheme. Tamil Nadu has not availed the benefit of the Scheme.  

The capital expenditure projects have been approved in diverse sectors of economy like, health, rural development, water supply, irrigation, power, transport, education and urban development.  

The scheme has three parts.  Part–I of the scheme covers the northeastern and hill States. Under this part, Rs.200 crore is allocated to each of the seven states of Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim and Tripura, and Rs.450 crore each is allocated to Himachal Pradesh and Uttarakhand.  In view of higher population and geographical area, Assam has been provided enhanced allocation of Rs.450 crore under the scheme.

Part-II of the scheme is, for all other states not included in Part-I. An amount of Rs.7,500 crore is earmarked for this part. This amount has been allocated amongst these states in proportion to their share of central tax as per the interim award of the 15th Finance Commission for the year 2020-21.

Part-III of the sheme is aimed at pushing various citizen-centric reforms in the states.  Under this part, an amount of Rs. 2,000 crore is earmarked. This amount will be available only to those states which carry out by December 31, 2020, at least three of the four specified reforms.  

 

Comments

 

Other News

India set to enter 5G era

After years of intense preparation, India is about to take the next step in information and communication technology. Prime Minister Narendra Modi will launch 5G services in India on October 1 and also inaugurate the 6th Edition of India Mobile Congress 2022 to be held till October 4, at Pragati Maidan, Ne

Ram Shravan Manan: A musical venture that leads to self-reflection

There is this popular saying that epics are never told, but always retold. Ramayana is one such epic and needs no introduction. Its plot is grounded in sacrifice and the end brings out hope that the good always wins. But how is a centuries-old tale of the prince of Ayodhya still relevant for today’s

Garib Kalyan Ann Yojana extended for three more months

In pursuance of the pro-people announcement made by the prime minister in 2021 and successful implementation of additional food security under PM Garib Kalyan Ann Yojana, the union cabinet has approved its extension for a further period of three months, from October to December 2022. At a ti

A great literary feast (that could’ve been even more sumptuous)

A Case of Indian Marvels: Dazzling Stories from the Country’s Finest Writers Edited by David Davidar Aleph, 390 pages, Rs 999 Change is the only constant, and India has always been doing so. Yet, after independence, if there was a year when the p

Govt e-Marketplace sellers report more business

“My volume of business has increased ever since I registered on GeM (Government e-Marketplace) in 2017. Earlier, I could supply items only in the vicinity of my shop in Fort area and only within Mumbai. Now, I ship my products all over the country! I have tied up with India Post and three private cou

How the Hindi Newspaper Business Changed

The Journey of Hindi Language Journalism in India: From Raj to Swaraj and Beyond By Mrinal Pande Orient BlackSwan, 188 pages, Rs 1,195.00 In India, the English-language media is considered the ‘national media’, while the language press

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter