Archive · 22 Sep 2025
Centre Increases Capex Loans to States to Boost Investments
The Indian government is giving more money to states to spend on projects they choose.
These are called "untied" loans.
The government has adjusted its plan to give more of these loans to states that are good at using the money.
The goal is to help states invest more in public projects, like building roads or schools.
States need to show they're using funds efficiently to get the extra money.
The government is also making sure money is spent quickly and correctly by using a new system.
This program aims to boost the economy and encourage states to make important changes.
The Centre has adjusted its guidelines to provide more untied capex loans to state governments.
Rs 1.5 lakh crore in interest-free loans is earmarked for FY26.
The untied portion of the loans is increased to give more efficient states more flexibility.
Additional allocation of up to 100% is available for North Eastern/Hill States.
The government is using the RBI platform to transfer funds to curb borrowing.
- Who
- The Centre (Indian government) and state governments
- What
- Increased allocation of untied capital expenditure (capex) loans to states
- When
- Ongoing, with changes implemented in FY26
- Where
- India
- Why
- To accelerate public investments and incentivize reforms
- Loan Type
- Untied capital expenditure loans
- Loan Amount (FY26)
- Rs 1.5 lakh crore
- Untied Funds Allocation (Original)
- Rs 57,000 crore
- Funds Released This Year
- Rs 50,000 crore
- SASCI Funds Provided Since FY21
- Rs 5.12 lakh crore