New Delhi: Seven states have met the Ministry of Finance's capital expenditure (CAPEX) target for the second quarter of 2021-22: Chhattisgarh, Kerala, Madhya Pradesh, Meghalaya, Punjab, Rajasthan, and Telangana.

The Department of Expenditure on Friday allowed these states permission to borrow an additional amount of Rs 16,691 crore as an incentive. The increased open market borrowing authority granted is equal to 0.5 percent of the state's gross domestic product (GSDP). As a result of the additional financial resources made available, states will be able to increase their capital spending.

Capital expenditure has a large multiplier impact, increasing the economy's future productive capacity and resulting in a faster pace of economic growth. As a result, borrowings up to 0.50 percent of GSDP were earmarked for incremental capital expenditure to be committed by the states during 2021-22, out of the net borrowing ceiling (NBC) of 4 percent of GSDP for the states for 2021-22. The Department of Spending set the additional capital expenditure objective for each state to qualify for this incremental borrowing.

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