BUSINESS
The Centre will likely enhance the untied 50-year interest-free capex loans for states to Rs 75,000 crore from Rs 55,000 crore for FY25, partly heeding the plea of the states for higher unconditional transfers to expedite utilisation of funds for projects, sources said. In the regular Budget presented on July 23, the capex loan outlays were enhaced by Rs 20,000 crore to Rs 1.5 trillion compared with Rs 1.3 trillion in the interim budget even as the Centre kept its overall capex budget unchanged at Rs 11.11 trillion. In the interim budget, the government had allocated Rs 75,000 crore for states’ initiating reforms covering all factors of production. On June 22, states including Odisha, Chhattisgarh and West Bengal demanded that the capex loans amount should be enhanced from Rs 55,000 crore to Rs 1 trillion in order to expedite better utilization of funds and timely achievement of project milestones. Such untied capex loans were earmarked at Rs 1 trillion in FY24 while reform/project-tied loans were pegged at Rs 30,000 crore. While untied loan disbursement has begun in FY25, the reform/project-linked Rs 75,000 crore loans will be rolled out soon. To avail this facility, the states will be required to initiate land-related reforms and actions, both in rural and urban areas, covering land administration, planning and management, and urban planning, usage and building bylaws. These will be incentivized for completion within the next three years through appropriate fiscal support. Rural land-related actions will include the assignment of a Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, as well as digitization of cadastral maps, survey of map sub-divisions as per current ownership, the establishment of land registry, and linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization for enhancing ‘Ease of Doing Business’. Land reforms are the most critical part for the country as it moves towards becoming the third-largest economy in the world in the next three years and aims to become a developed nation by 2047. None
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