State governments on Saturday urged finance minister Nirmala Sitharaman to allocate higher funds under the Scheme for Special Assistance to States for Capital Investment (SASCI) in the upcoming budget, and continue with the scheme, quoting its significance for infrastructure creation in the states.  

The scheme was launched in 2020-21 by the ministry to assist the state governments with capital expenditure and infrastructure in the states via 50-year interest free loans. The total allocation to the states under the scheme ever since it was launched stands at ₹4.25 lakh crore.

Higher allocation under SASCI to give fillip to infra: state governments

The suggestion by the states to continue with the scheme and enhance the allocation came up during FM’s pre-budget deliberations with the state governments yesterday.

“The participants gave several valuable suggestions to the Union Finance Minister for consideration in the Union Budget for FY 2026-27. Specifically, many participants highlighted that the Scheme for Special Assistance to States for Capital Investment (SASCI) be continued with higher allocations as it helps in fast-tracking asset creation and supports capital investments in the States and UTs with Legislature,” said a release from the ministry of finance.

“It is worth mentioning that since 2020-21, the Union Government has released more than ₹4.25 lakh crore as 50-year interest free loans to the States under SASCI,” the release pointed out. It may be noted that FM Sitharaman has held sectoral pre-budget deliberations with multiple sectors of the economy last month.

Govt receives wide-ranging suggestions on budget

The union finance ministry has received a wide-ranging set of suggestions ahead of the budget. Industry bodies have called for privatization of PSUs, and higher investments in infrastructure and digital economy.  

In its pre-budget recommendations today, industry body CII today urged the government to fast-track PSU privatisation to unlock value, and mobilise resources. The industry body has suggested investor led three year pipeline for the same focusing on sectors where private sector can enhance efficiency and bring about global competitiveness.

The PHD Chamber of Commerce and Industry (PHDCCI) has called for public capital expenditure stating its paramount importance in sustaining India’s growth momentum. It also called for focus across digital infrastructure with investment in data centres, broadband and digital skilling.