Land, urban planning among key reforms for capex loans

DIGITAL PUBLIC INFRASTRUCTURE for agriculture, efficiency in financial management, urban planning and land-related reforms are among the conditions for states to qualify for tied component of 50-year interest-free capex loans from the Centre.

- PRASANTA SAHU

A total of ₹52,000 crore is earmarked for release to states if the conditions are met, while the overall size of the capex loan for 2025-26 is ₹1.5 lakh crore.

This is in addition to previously issued guidelines covering ₹87,000 crore in loans — ₹57,000 crore in untied loans for states' priority projects and ₹30,000 crore linked to reforms or specific projects. With this, guidelines have been issued for ₹1.39-lakh crore loans so far.

According to the latest guidelines covering ₹52,000-crore soft loans to states, ₹13,000 crore has been earmarked for governance reforms like building municipal cadres, finance reforms, including integrated property tax portal and urban land and planning reforms. This component will incentivize for filling and creation of new posts for improving service delivery including sanction of posts for environmental engineers and hydrologist.