Why in News
The Centre’s 50-year interest-free capex loans under the Scheme for Special Assistance to States for Capital Investment (SASCI) are driving major land reforms across India by pushing states to modernise property systems, boosting efficiency, and industrial growth.
About the Scheme
| Aspect | Details |
|---|---|
| Name | Scheme for Special Assistance to States for Capital Investment (SASCI) |
| Launch Year | 2020–21 (initially as a pandemic stimulus measure) |
| Objective | To stimulate economic recovery and long-term growth through capital expenditure |
| Loan Terms | Interest-free loans for 50 years |
Key Features
| Feature | Description |
|---|---|
| Capital Investment Focus | Exclusive support for capital expenditure to improve infrastructure and long-term assets |
| High Multiplier Effect | Estimated Rs 3 rise in GDP for every Rs 1 of capital expenditure |
| Targeted Sectors | Urban reforms, vehicle scrapping, police housing, Make in India, digital infra, OFC, tourism |
| Loan Allocation (2024–25) | ₹1.5 lakh crore, up from ₹12,000 crore in 2020–21 |
Major Progress & Initiatives
| Area | Details |
|---|---|
| Industrial Reforms | – 22 states revised building bylaws for industrial/commercial plots – 18 states optimised land use via relaxed setback/parking norms – 12 states doubled built-up area for flatted factories – 8 states increased FAR in commercial zones |
| Land Digitisation | – 90% of cadastral maps geo-referenced – 30% of land parcels assigned Unique Land Parcel Identification Numbers (ULPIN or Bhu-Aadhar) – 91% digitisation of Records of Rights (RoR) |
| Tourism Development | ₹3,295 crore sanctioned for 40 projects in 23 states to create iconic global-standard tourist centres |
Capital Expenditure (Capex) Overview
| Feature | Description |
|---|---|
| Definition | Long-term investment on physical assets like infrastructure, machinery, and tech |
| Difference from Opex | Capex creates assets; Opex covers daily operations |
| Union Budget FY 2025–26 | ₹11.21 lakh crore (3.1% of GDP) allocated |
| Economic Role | Acts as a countercyclical tool during downturns, encourages private investment, reduces liabilities |
Prelims MCQs
- Consider the following statements regarding the Scheme for Special Assistance to States for Capital Investment (SASCI):
- It offers interest-free loans to states for capital expenditure.
- The scheme was launched as a post-pandemic stimulus in 2018–19.
- SASCI supports reforms in areas like urban planning, land digitisation, and tourism.
Which of the above statements is/are correct?
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3
Answer: b) 1 and 3 only
- With reference to the capital expenditure of the Government of India, which of the following is/are correct?
- Capex includes expenses on salaries, pensions, and interest payments.
- It is used to acquire or upgrade physical assets and infrastructure.
- Capex leads to asset creation and has a high GDP multiplier effect.
Select the correct answer using the code below:
a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
Answer: b) 2 and 3 only
- Which of the following reforms have been undertaken by states under SASCI?
- Doubling the built-up area for flatted factories
- Increasing Floor Area Ratio (FAR) in rural zones
- Assigning Unique Land Parcel Identification Numbers (ULPIN)
Select the correct answer:
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
Answer: c) 1 and 3 only
Mains Question
Q. The Scheme for Special Assistance to States for Capital Investment (SASCI) is emerging as a powerful tool for economic transformation in India. Critically examine its impact on industrial development, land reforms, and tourism infrastructure. Also discuss the importance of capital expenditure in promoting sustainable economic growth.
