SASCI scheme
Why in News?
The Central Government recently approved all 28 major infrastructure projects proposed by the Delhi government under SASCI, valuing ₹1,647 crore.
Structure and Funding Mechanism
- SASCI Stand For: Special Assistance to States for Capital Investment
- Launch Year: Introduced in FY 2020–21 by the Ministry of Finance to support state-level capital expenditure (capex) and prevent public spending cutbacks during the COVID-19 pandemic.
- 50-Year Interest-Free Loans: Financial aid is given entirely in the form of 50-year interest-free loans rather than grants, ensuring states do not face immediate debt servicing pressure.
- Borrowing Cap Relief: Funds released under SASCI are over and above the normal Net Borrowing Ceiling (NBC) permitted to states.
- Tied vs. Untied Structure: Outlays are split into "untied" funds (for states to spend flexibly on general capex) and "tied" funds (conditioned on states implementing core administrative reforms).
Key Sectors and Components covered
The scheme is broken into several thematic components to drive specific reforms:
The scheme is broken into several thematic components to drive specific reforms:
- Development of Iconic Tourist Centres: Financial assistance (like the ₹3,295 crore allotted previously for 40 projects) is designated for upgrading lesser-known historic and cultural landmarks to global scale standards.
- Digital Infrastructure (Agri Stack and Telecom): States are incentivised to link Farmer IDs with fertilizer usage and standardise digital "Right of Way" (RoW) rules.
- Urban Reforms: Focused on updating industrial building bylaws, municipal accounting, and optimal urban land utilisation.
- Mining Sector Upgrades: A ₹5,000 crore component specifically aims at mine operationalisation and transparent resource allocation governance.
- Other Elements: Includes allocations for police personnel housing, setting up automated vehicle scrappage test centers, and building Unity Malls to promote local "One District One Product" (ODOP) merchandise.
Selection Method and Implementation
- Challenge Method: Key project tracks (like the tourism infrastructure) use a competitive challenge-based framework.
- Evaluation Parameters: Projects submitted by state governments are screened for site connectivity, carrying capacity, localized economic growth, and sustainability mechanisms.
- Execution & Timelines: While the Centre supplies 100% of the loan funding, projects are implemented and operated entirely by the respective State Governments. Specific infrastructure projects carry a tight, maximum 2-year execution period.
- High GDP Multiplier Effect: Capital expenditure under SASCI has a profound multiplier response; every ₹1 spent under the scheme is estimated to generate ₹3 in national Gross Domestic Product (GDP).
- Encourages Internal Fiscal Discipline: By tying substantial bonuses (like the ₹756 crore allocated to Delhi) to states using their own resources for capex, the scheme discourages a reliance on central hands-outs and drives fiscal prudence.
