• The scheme launched in 2021-22 provides 50-year interest-free loans for capital investment projects to states.
• For the 2022-23 Financial Year (FY) a total financial assistance of Rs 1 lakh crore would be given to states.
• Key features o The loan under the scheme would be over and above the normal borrowing ceiling allowed to states for the FY 2022-23 and should be spent in the same year. ✓ Funds not used by a state within a reasonable time period may be allocated to another state. o 7 parts of the scheme: For capital works (PM Gati Shakti Master Plan will receive priority); PM Gati Shakti related expenditure; PM Gram Sadak Yojana; Incentives for digitisation; Optical Fibre Cable; Urban reforms; Disinvestment and monetisation. o Eligible projects: New or ongoing projects or for settling pending bills in ongoing capital projects. States may submit projects of higher value than the funds allocated, indicating their preference/priority. o Exclusion: Projects with capital outlay of less than 5 crore (2 crore for North East) and repair and maintenance projects irrespective of capital outlay are not eligible. • Significance of the scheme: Capital expenditure has a multiplier effect, enhancing the future productive capacity of the economy and results in a higher rate of economic growth.