The Centre has allowed seven states to additionally borrow Rs 16,691 crore on meeting capital expenditure targets for the first half of the ongoing fiscal, Finance Secretary TV Somanathan said.

       Chhattisgarh, Kerala, Madhya Pradesh, Meghalaya, Punjab, Rajasthan and Telangana have achieved the target of 45 per cent of the total capital for FY22 up to July-September.

       Of the net borrowing cap of four per cent of Gross State Development Product (GSDP) for 2021-22, borrowings up to 0.5 per cent of GSDP were earmarked for incremental capital expenditure. A capex target of Rs 5.79 trillion has been set for all states, and if their capital spending exceeds this target, they will be eligible to borrow an additional Rs 1.05 trillion over their permissible borrowing limit of Rs 8.46 trillion. This Rs 8.46 trillion is the net borrowing limit for states for financial year 2021-22, set at 4 per cent of their GSDP.

       States were required to achieve at least 15 per cent of this full year target by the end of first quarter, 45 percent by the end of second quarter; 70 percent by the end of third quarter and 100 per cent by March 31, 2022.

       The Centre had earlier undertaken capex review of states in September 2021, and an additional borrowing permission of Rs 15,721 crore was issued to 11 States for meeting the target.

       After two rounds of review of capex, a total additional borrowing permission of Rs 32,412 crore has been given to states by the Centre.