New Delhi, Nov 12 (TIWN) Seven states -- Chhattisgarh, Kerala, Madhya Pradesh, Meghalaya, Punjab, Rajasthan and Telangana -- have achieved the target set by the Ministry of Finance for the capital expenditure upto 2nd Quarter of 2021-22.

The additional open market borrowing permission issued is equivalent to 0.5 per cent of Gross State Domestic Product (GSDP).  Additional financial resources thus made available will help the states in pushing their capital expenditure further.  Capital expenditure has a high multiplier effect, enhances the future productive capacity of the economy, and results in a higher rate of economic growth. Accordingly, out of the net borrowing ceiling (NBC) of 4 per cent of GSDP for the states for 2021-22, borrowings upto 0.50 per cent of GSDP were earmarked for incremental capital expenditure to be incurred by the states during 2021-22.  The target for incremental capital expenditure for each state to qualify for this incremental borrowing was fixed by the Department of Expenditure.  To become eligible for incremental borrowing, states were required to achieve at least 15 per cent of the target set for 2021-22 by the end of 1st quarter of 2021-22, 45 per cent by the end of 2nd quarter, 70 per cent by the end of 3rd quarter and 100 per cent by March 31, 2022.