On account of this, the 11 states have been allowed, as an incentive, an opportunity to raise Rs15,721 crore overall through market borrowing from financial institutions. The so raised will be spent as Capital Expenditure for the creation of assets like bridges, hospitals and other infrastructural entities, as well as to meet the costs of loan repayment and other such expenditures.
This has been done after the first review of the capital expenditures made by the respective state governments. Subsequently, the reviews will be made in December to assess the capital expenditure made till September, followed by that in March next year, and finally in June.
The Centre allows the states to raise money from the open market, but the cap on the total amount that can be raised in a financial year is 4% of the Gross State Domestic Product (GSDP).
During the 2021-22 budget presented in the state assembly on February 22, the estimated GSDP was put at over Rs7.57 lakh crore. The estimated outlay for capital expenditure for the creation of assets and loan repayment was Rs41,231 crore, including Rs30,786 crore for expenditure on the creation of productive assets, sources said.
Bihar and the states concerned will be allowed to raise money in an incremental manner over the current fiscal in consonance with the achievement made in the subsequent quarters.