The Scheme for Special Assistance to States for Capital Investment (SASCI) is a Central Sector Scheme launched by the Ministry of Finance. It originated in 2020-21 as a response to the COVID-19 pandemic, aiming to stimulate economic recovery by boosting capital expenditure (Capex). The scheme addresses the problem of low state-level capital spending, which is crucial because every rupee spent on Capex is estimated to generate a high multiplier effect on the Gross Domestic Product (GDP).
The core mechanism of the scheme is the provision of a 50-year interest-free loan to State Governments exclusively for capital investment projects. This loan is provided over and above the normal borrowing ceiling permitted to the States. The scheme has been continuously expanded and redesigned, with the total allocation growing from ₹12,000 crore in 2020-21 to ₹1,50,000 crore in 2024-25.
The scheme is structured into multiple parts to incentivize specific reforms. The largest component, Part-I, allocates funds to States in proportion to their share of central taxes and duties, as determined by the 15th Finance Commission. Other parts link the release of funds to the achievement of reforms in areas like urban planning, vehicle scrapping, disinvestment, and the development of iconic tourist centers. Projects aligned with the PM Gati Shakti Master Plan are given priority. While the scheme's size and specific reform components have changed, the fundamental provision of the 50-year interest-free loan has remained constant.