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Interest-Free Long-Term Loans for Empowering Development in India

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  • Manoj Kumar Agarwal
  • Samia Ansari

Abstract

Interest-free long-term loans for capex to the Subnational Governments of India, under the Special Assistance to States for Capital Investment (SASCI) Scheme, would facilitate the effective implementation of the present developmental schemes and infrastructure projects across all the States in unison, thereby empowering development. The Central Government of India’s expedited release of capex loans to states is accelerating development spending and contributing to an increase in overall public capex. Consequently, this boost in public capex is also crowding in private capex. Given the reduction in GST compensation grants and borrowing limits, it would be more advantageous for the State Governments to fully utilize the additional borrowing as interest-free loans for capital expenditures.

Suggested Citation

  • Manoj Kumar Agarwal & Samia Ansari, 2023. "Interest-Free Long-Term Loans for Empowering Development in India," European Journal of Development Studies, European Open Science, vol. 3(6), pages 32-36, November.
    • Handle: RePEc:epw:develo:v:3:y:2023:i:6:id:15319
    DOI: 10.24018/ejdevelop.2023.3.6.319
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    References listed on IDEAS

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    1. Naoyuki Yoshino & Farhad Taghizadeh-Hesary & Hiroaki Miyamoto, 2017. "The Ineffectiveness of Japan’s Negative Interest Rate Policy," ADB Institute Series on Development Economics, in: Naoyuki Yoshino & Farhad Taghizadeh-Hesary (ed.), Japan’s Lost Decade, chapter 0, pages 147-168, Springer.
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