India Allocates Rs 3.6 Lakh Crore in Interest-Free Loans to Support 22 States' Development

Union Finance Minister Nirmala Sitharaman announced that Rs 3.6 lakh crore has been distributed to 22 states under a 50-year interest-free assistance scheme. This initiative aims to boost capital assets and enhance spending capabilities. The funds have been utilised over the past four years, leading to over 10% growth in capital expenditure from state resources.

India's capital investment has seen significant growth, rising from 1.7% of GDP in 2013-14 to 4.1% in 2024-25, including contributions from states. This increase reflects both central and state government efforts in capital expenditure. Sitharaman highlighted these developments at the CII GCC Business Summit.

Infrastructure Development and Capital Investment

Over the last 11 years, India has operationalised 88 airports and laid 31,000 kilometres of new rail tracks. Metro networks have expanded more than four times, port capacities have doubled, and the national highway network has grown by 60%. These infrastructure improvements address logistics challenges and support economic growth.

The central government has focused on overcoming infrastructure and logistics bottlenecks through substantial investments. The effective capital expenditure, which includes both central and state contributions, reached 4.1% of GDP in 2024-25. This coordinated effort aims to strengthen India's infrastructure framework.

Global Capability Centres and State Collaboration

Sitharaman emphasised the role of state governments in enhancing India's Global Capability Centres (GCC) advantage. A national framework was proposed in the last Union Budget to guide states in promoting GCCs in emerging Tier 2 cities. Andhra Pradesh serves as a successful example of policy-led leadership aligning with national priorities.

The collaboration between the Centre, states, industry associations like CII, and global companies is crucial for advancing India's GCC strength. This partnership aims to create a broad-based, future-ready sector that benefits the population through innovation, job creation, and inclusive regional development.

Sitharaman stated that these efforts will not only solidify India's leadership in the GCC landscape but also open new avenues for growth. The initiatives contribute towards Viksit Bharat 2047 by fostering innovation and regional development across the country.

With inputs from PTI