Ms Sitharaman highlighted that with favourable international perception of India’s growth and in light of the structural, sectoral and financial reforms undertaken by the government of India, global and domestic investors are upbeat about the investment attractiveness of the country.

The states should leverage this opportunity to scale up investments and growth, she said. The Finance Minister also said that the government of India has taken concrete steps to increase capital spending and drive infrastructure and investment-led growth. Benefits of higher investment in infrastructure manifest in the form of increased employment opportunities, access to market and materials, improved quality of life and empowerment of vulnerable sections, she said.

The Union budget for FY 2021-22 has allocated Rs 5.54 lakh crore capital outlay, an increase of 34.5 per cent over last year. Additionally, around Rs 2 lakh crore allocation is for states and autonomous bodies for their capital expenditure. Over and above this, a new incentive scheme was launched by the government for states that could achieve at least 15 per cent of the target set for FY 21-22 by the end of the first quarter, 45 per cent by end of the second quarter, and 70 per cent by the end of the third quarter. States that achieve their targets become eligible for incremental borrowing. After the end of the first quarter, 11 states got permission to mobilise an additional total amount of Rs 15,271 crore.