FY26 Capex Loan Outlay May Go Up After Mid-Year Review

Mid-year review is slated for September-October; last revision had seen a hike of about 35%

- Rhik Kundu

The Centre is considering a higher allocation for FY26 under its 50-year interest-free capital expenditure loan for states, the Special Assistance to States for Capital Expenditure (SASCE) scheme, following a pickup in fund sanctions early in the current fiscal, two people familiar with the development said.

A final decision, along with the size of the increase, is expected after the mid-year review in September-October. The last revision had seen a hike of around 35%.

The SASCE scheme, launched in FY21 to stimulate post-pandemic recovery through state-led infrastructure investment, has become a key instrument for boosting public capital expenditure.

Allocations have remained unchanged over the last two years at ₹1.5 trillion for both FY25 and FY26, after being increased from ₹1.1 trillion in FY24.

However, the pace of utilization this year has been swift.