February 14, 2026

Special Assistance Scheme

March 5, 2025
  • Recently, the Government of India has disbursed funds to states under the Special Assistance Scheme.
  • About: The scheme provides states with 50-year interest-free loans to boost capital investment and support reforms. Launched in FY 2021, it aims to strengthen state-led development.
  • Objective: Provides 50-year interest-free loans to states for capital investment and reforms.
  • Funding Growth:
  1. Initial Allocation (2021) – ₹12,000 crore
  2. FY24 Allocation – ₹1.3 trillion (₹30,000 crore linked to outcomes)
  3. FY25 Allocation – ₹1.25 trillion (97% approved for distribution)
  • Fund Distribution:
  1. ₹55,000 crore based on states’ share of central taxes
  2. ₹95,000 crore tied to specific reform criteria
  • Key Reform Areas:
  1. Tourism development, vehicle scrappage incentives, industrial growth
  2. Compliance with Centrally Sponsored Schemes and fund transparency
  • Top Beneficiary States (FY25):
  1. Uttar Pradesh – ₹13,042 crore
  2. Bihar – ₹12,907 crore
  3. Madhya Pradesh – ₹10,635 crore
  4. West Bengal – Among leading recipients
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