A majority of Indian states on Saturday expressed strong support for the Union government’s reform agenda aimed at achieving the ambitious goal of “Viksit Bharat” or a developed India by 2047. During the pre-budget consultation meeting chaired by Union Finance Minister Nirmala Sitharaman in New Delhi, state leaders urged the Centre to continue the Special Assistance to States for Capital Investment (SASCI) scheme, which provides states with long-term, interest-free loans to fund capital expenditure. According to officials familiar with the discussions, the SASCI program was widely recognized as an effective instrument for enabling states to pursue large-scale infrastructure development while adhering to fiscal prudence.

The pre-budget meeting brought together chief ministers, deputy chief ministers, governors, and finance ministers from across the country. Representatives from Delhi, Goa, Haryana, Jammu and Kashmir, Meghalaya, and Sikkim, among others, were present, alongside deputy chief ministers from Arunachal Pradesh, Madhya Pradesh, Odisha, Rajasthan, and Telangana. The Manipur governor and other state finance ministers also participated in the deliberations. The forum was designed to provide states with the opportunity to share their priorities for the upcoming Union Budget 2026–27, including proposals for infrastructure development, capital investment, social welfare schemes, and economic reforms.

Finance Minister Sitharaman highlighted the central role that states play in strengthening cooperative federalism and implementing the government’s reform agenda. Officials said the SASCI scheme was particularly emphasized during discussions, with states acknowledging its effectiveness in encouraging long-term capital expenditure, improving infrastructure, and fostering sustainable economic growth. Participants noted that the program allows them to plan for large-scale projects without placing immediate pressure on state finances, thanks to its 50-year interest-free loan structure.

The SASCI initiative was originally launched in 2020–21 in response to the economic slowdown caused by the COVID-19 pandemic. It aimed to incentivize states to undertake capital projects, including transportation networks, urban infrastructure, water and sanitation systems, and other long-term developmental programs. Minister of State for Finance Pankaj Chaudhary, who attended the meeting, told the Rajya Sabha in December 2025 that from 2020–21 to 2025–26 (up to December 3, 2025), a total of ₹4,24,225.95 crore had been disbursed under the SASCI scheme, illustrating the scale and reach of the program.

The scheme began with a modest corpus of ₹12,000 crore in 2020–21 but quickly gained traction among states, prompting the Centre to raise the allocation significantly over subsequent years. By 2022–23, the corpus had increased to ₹1.07 lakh crore, and for 2023–24, the budget estimate was further raised to ₹1.30 lakh crore, though actual expenditure was recorded at ₹1,09,554.30 crore. For the current financial year, 2025–26, the allocation has been set at ₹1.50 lakh crore, despite capacity constraints in some states and a reduction in the revised estimate from the previous year.

Sitharaman’s efforts to promote the SASCI scheme have been notable because, unlike many other centrally sponsored programs, it goes beyond the recommendations of the Finance Commission. In a recent parliamentary debate on the Pan Masala Cess Bill, the finance minister highlighted that the Modi government continued the SASCI program even in the absence of specific guidance from the Finance Commission. “Even as the Finance Commission did not recommend 50-year interest-free loans to states for capital expenditure, Prime Minister Modi implemented this initiative for the benefit of states. Beyond Finance Commission recommendations, the Centre has also provided ₹4.24 lakh crore in 50-year interest-free loans,” she said.

State representatives reportedly highlighted how the SASCI scheme enables them to plan and implement transformative projects that might otherwise be constrained by short-term fiscal pressures. The availability of long-term, low-cost financing allows states to focus on building infrastructure that catalyzes economic growth, generates employment, and improves public services. Several state officials also emphasized the importance of continued support from the Centre to maintain momentum in development and to ensure that ambitious goals, such as the vision of “Viksit Bharat” by 2047, remain achievable.

During the discussions, participants underscored that the SASCI program is particularly useful in bridging the gap in capital investment in sectors critical to sustainable development. These include road and transport networks, urban infrastructure, water and sanitation projects, energy and power distribution, education and health facilities, and other strategic initiatives aimed at improving the quality of life for citizens. By providing interest-free loans for 50 years, the program enables states to undertake such projects without straining their annual budgets or resorting to costly borrowing, a point that was widely appreciated during the consultation.

Experts observing the meeting noted that the SASCI scheme aligns with the Union government’s broader economic agenda of promoting fiscal discipline while encouraging growth-oriented spending. By incentivizing states to invest in capital projects, the program not only strengthens the country’s physical and social infrastructure but also enhances the overall investment climate. Analysts said that such initiatives are crucial for India’s long-term economic competitiveness, as they help states develop the infrastructure needed to attract private investment, improve logistics, and support industrial and technological growth.

The pre-budget consultation also provided a platform for states to share specific proposals and priorities for the upcoming Union Budget. These included requests for additional support in strategic sectors, expansion of urban and rural infrastructure, investment in renewable energy and water management systems, and development of education and healthcare infrastructure. Many states also stressed the importance of maintaining the SASCI scheme’s framework and providing flexibility to tailor investments based on regional developmental needs.

Officials familiar with the proceedings said that states’ feedback was well-received by the Centre, which reiterated its commitment to supporting reforms and incentivizing capital investment. The meeting underscored the importance of cooperative federalism in achieving national development goals, emphasizing that collaboration between the Centre and states is essential for realizing the vision of a “Viksit Bharat” by 2047. By aligning the Union government’s policy priorities with the developmental aspirations of states, the pre-budget consultations aimed to ensure that the forthcoming Union Budget would be responsive to both national and regional needs.

In conclusion, the pre-budget meeting highlighted a broad consensus among Indian states in support of the Union government’s reform agenda and the long-term developmental vision for India. The SASCI scheme, with its unique 50-year interest-free loan structure, was recognized as a pivotal instrument in facilitating large-scale capital expenditure and advancing the goal of a developed India. By promoting infrastructure investment, encouraging fiscal prudence, and fostering cooperative federalism, the Centre and states are collectively working towards building a stronger, more self-reliant, and economically resilient nation capable of achieving the milestones of “Viksit Bharat” by 2047.