States urged to expedite capex proposals, use up funds before March 31

New Delhi: The department of expenditure is reaching out to states to fast-track pending proposals and clear eligible projects under the Special Assistance to States for Capital Expenditure scheme (SASCI) to avoid last-mile delays in sanction and disbursal, people aware of the development told ET.

The Centre has released ₹1.04 lakh crore to states under the scheme as of February 10 and with less than two months left, it is nudging states to ensure timely utilisation before the March 31 deadline.

In the FY26 union budget, the government revised the scheme's total outlay to ₹1.44 lakh crore from ₹1.50 lakh crore, reflecting a recalibration in the final phase of the financial year.

"We have reached out to the states, asking them to expedite proposals which are ready," a senior official told ET. "We are confident that allocated funds would be exhausted."


The scheme remains central to the government's strategy of sustaining public investment by backing states' infrastructure spending. Under SASCI, the Centre provides 50-year interest-free loans to states, with part of the assistance linked to the implementation of specific reforms and another portion kept untied, allowing states flexibility in project selection.

The scheme was introduced during the Covid-19 pandemic to support states in boosting capital expenditure at a time when revenues were under strain and private investment had slowed.