E-Paper
U.P. ramping up capex, eyes 2nd tranche of central loan
The state government will have to spend 75% of the first instalment and 45% ( ₹37,415 crore) of the state’s capital expenditure target of ₹83,144 crore by September 30, 2023 to get the second instalment.
The Uttar Pradesh government is expediting measures to increase its capital expenditure considerably this month to get the second instalment of an interest-free loan for 50 years from the Centre under its special assistance scheme for the states.
Under the Special Assistance to States for Capital Investment scheme, the state government received the first instalment of ₹1,19,59.93 crore loan from the Union government recently. The state government will have to spend 75% of the first instalment and 45% ( ₹37,415 crore) of the state’s capital expenditure target of ₹83,144 crore by September 30, 2023 to get the second instalment.
As the state government has been able to incur capital expenditure of ₹23,348 crore by August 31, 2023, it will have to spend ₹14,067 crore in September 2023 more to meet the conditions to get the second instalment of the special assistance.
In a bid to meet the Centre’s conditions, the state government has issued a fresh government order (GO) dated August 1, 2023, providing for release of the state’s share immediately in case of delay in receiving the Union government’s share. The state government’s GO dated March 17, 2023, provided for release of the state’s share if the Union government’s allocation for a scheme was delayed in the second half of the financial year.
Uttar Pradesh minister for finance Suresh Khanna reviewed the situation on the total expenditure front at a high-level meeting on September 6.
“Yes, we are monitoring the capital expenditure and undertaking measures to boost the spending of funds earmarked under capital expenditure head. We are working to achieve our capital expenditure target by the September 30, 2023, deadline,” Khanna said when asked to comment.
The state government proposes to review the status of capital investment expenditure again in October-November 2023.
A scrutiny of the expenditure incurred by various departments of the state government by August 31, 2023, indicates that out of the proposed expenditure of ₹6.90 lakh crore in 2023-24, the state government was able to spend about ₹1.83 lakh crore by August 31, 2023, which is about 26.5% of the funds.
This included expenditure of ₹1,50,607 crore (30%) out of ₹5,02,354 crore under revenue expenditure head and ₹32,401 crore (17.2%) of the proposed ₹1,87,888 crore.
The Union government is providing special assistance of ₹17,939 crore to implement 217 proposals of five major departments.
These include 16 proposals of the energy department ( ₹9,676.14 crore), 164 proposals of PWD ( ₹5,026.52 crore), one proposal of the transport department ( ₹200 crore),
infrastructure and industrial development’s 20 proposals ( ₹2,849.27 crore) and Home (police) department’s 16 proposals ( ₹187 crore).
A break-up of the total expenditure and capital expenditure incurred by these departments include 33% of energy department (18.6% capital expenditure), PWD’s 28.3% (12.8% capital expenditure), transport department’s 17.3% (3.7% capital expenditure), heavy and medium industry 12.6% (6% capital expenditure) and home department’s 30.1% (10.6% capital expenditure).
The finance minister recently informed that the government has decided to continue the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions, with a significantly enhanced outlay of ₹1.3 lakh crore.
The Central government has launched the Special Assistance to States for Capital Investment Scheme for 2022-23. Under this scheme, financial assistance is provided to the state governments in the form of a 50-year interest free loan for capital investment projects.
