Q: What are interest-free loans to states?
A: Interest-free loans to states are financial supports provided by the central government to state governments, which require repayment of the principal amount but incur no interest charges.
Q: Why does the central government offer these loans?
A: These loans are intended to boost capital expenditure in states, funding projects in vital sectors like health, education, infrastructure, water supply, and railways.
Q: How large are the interest-free loans currently?
A: The central government has allocated a corpus of Rs.1.30 lakh crore for interest-free loans to states.
Q: What is the expected extension of these loans?
A: The current scheme of interest-free loans might be extended to more than double the original amount, potentially over Rs.3 lakh crore.
Q: When did this scheme begin?
A: The scheme started as part of the Special Assistance to States for Capital Investment to propel economic growth and infrastructure development.
Q: What is the scheme’s impact on economic growth?
A: Public investments in infrastructure projects have significantly contributed to making India one of the fastest-growing major economies.
Q: What is the proportion of approved budgets utilized?
A: Over 60% of the approved corpus has already been disbursed for various projects across the states.
Q: How does the government intend to incentivize states?
A: The government plans to incentivize states by considering projects as grants if they are implemented within a set timeframe.
Q: When was the record growth of the Indian economy noted?
A: India’s GDP grew by 6.7% in the second quarter of the fiscal year 2023-24, marking a significant economic upturn.
