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With reference to the Special Assistance to States for Capital Investment Scheme, consider the following statements:
- Under the scheme, financial assistance is provided to the States Governments in the form of interest free loan.
- The loan provided under the scheme comes within borrowing ceiling allowed to the States.
Which of the statements given above is/are not correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
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With reference to the Special Assistance to States for Capital Investm...
Statement 1: Under the scheme, financial assistance is provided to the States Governments in the form of interest-free loan.
This statement is correct. The Special Assistance to States for Capital Investment Scheme is a central government scheme that provides financial assistance to state governments in the form of an interest-free loan. The aim of the scheme is to support states in financing their infrastructure projects and to promote overall economic growth.
Statement 2: The loan provided under the scheme comes within the borrowing ceiling allowed to the states.
This statement is incorrect. The loan provided under the Special Assistance to States for Capital Investment Scheme is outside the borrowing ceiling allowed to the states. The borrowing ceiling refers to the limit set by the central government on the amount that states can borrow from the market or financial institutions.
The purpose of providing assistance outside the borrowing ceiling is to enable states to undertake additional capital investments without affecting their borrowing limits. This allows the states to have access to additional funds for infrastructure development without putting a strain on their finances.
The scheme provides flexibility to states in terms of repayment of the loan. The loan amount is repayable in 50 equal annual installments, starting from the 6th year of disbursement. This allows states to plan their repayment schedule and manage their finances effectively.
The Special Assistance to States for Capital Investment Scheme is an important initiative of the central government to promote infrastructure development in the states. It provides financial support to states for the establishment of new projects or expansion of existing projects in sectors such as transport, power, irrigation, water supply, and sanitation.
In conclusion, statement 1 is correct as financial assistance is provided in the form of an interest-free loan, but statement 2 is incorrect as the loan provided under the scheme is outside the borrowing ceiling allowed to the states.
This statement is correct. The Special Assistance to States for Capital Investment Scheme is a central government scheme that provides financial assistance to state governments in the form of an interest-free loan. The aim of the scheme is to support states in financing their infrastructure projects and to promote overall economic growth.
Statement 2: The loan provided under the scheme comes within the borrowing ceiling allowed to the states.
This statement is incorrect. The loan provided under the Special Assistance to States for Capital Investment Scheme is outside the borrowing ceiling allowed to the states. The borrowing ceiling refers to the limit set by the central government on the amount that states can borrow from the market or financial institutions.
The purpose of providing assistance outside the borrowing ceiling is to enable states to undertake additional capital investments without affecting their borrowing limits. This allows the states to have access to additional funds for infrastructure development without putting a strain on their finances.
The scheme provides flexibility to states in terms of repayment of the loan. The loan amount is repayable in 50 equal annual installments, starting from the 6th year of disbursement. This allows states to plan their repayment schedule and manage their finances effectively.
The Special Assistance to States for Capital Investment Scheme is an important initiative of the central government to promote infrastructure development in the states. It provides financial support to states for the establishment of new projects or expansion of existing projects in sectors such as transport, power, irrigation, water supply, and sanitation.
In conclusion, statement 1 is correct as financial assistance is provided in the form of an interest-free loan, but statement 2 is incorrect as the loan provided under the scheme is outside the borrowing ceiling allowed to the states.
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With reference to the Special Assistance to States for Capital Investm...
Recently, The Central Government decided to give an additional ₹2,000 crore to States under the Special Assistance for Capital Investment scheme to incentivise them to scrap old vehicles and also provide tax concessions to individuals for it.
About Special Assistance to States for Capital Investment Scheme
- Under this Scheme, financial assistance is provided to the States Governments in the form of a 50-year interest free loan for capital investment projects.
- To avail the benefit for investments made this fiscal, states will have to submit details like name of the project, capital outlay, completion period and its economic justification to the expenditure department of the Union finance ministry.
- The loan provided under the scheme will be over and above the normal borrowing ceiling allowed to the States.
Hence only statement 1 is correct.
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With reference to the Special Assistance to States for Capital Investment Scheme, consider the following statements: Under the scheme, financial assistance is provided to the States Governments in the form of interest free loan. The loan provided under the scheme comes within borrowing ceiling allowed to the States.Which of the statements given above is/arenotcorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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