Scheme for Special Assistance to States for Capital Investment — UPPSC current affairs 14 October 2026

Department of Expenditure urged State governments to accelerate the utilization of interest-free capex loans following slow fund absorption.

Capital Expenditure (Capex)

Government spending directed toward creating long-term physical or financial assets.

50-Year Interest-Free Loan

Long-term fiscal assistance extended by the Centre to States without interest burden.

Department of Expenditure

Nodal department in the Ministry of Finance overseeing financial management and central releases to States.

Multiplier Effect

Proportional increase in final national income resulting from an initial injection of spending.

Centrally funded facility offering 50-year interest-free loans to State governments to boost public capital expenditure.
Administered by the Department of Expenditure, Ministry of Finance, to accelerate infrastructure, asset creation, and regional growth.

Central allocation released approximately ₹51,000 crore by October 1 under the scheme.
States have utilized only about one-fourth of allocated funds, prompting central intervention to resolve project execution delays.

Capital expenditure generates high economic multiplier effects, crowding in private investment and enhancing long-term infrastructure capability.

Special Assistance for Capital Investment provides 50-year interest-free loans to States.

Role of central fiscal support in driving state-level public capital formation and addressing absorptive capacity bottlenecks.

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