New Delhi, April 22 -- The Centre's Special Assistance to States for Capital Expenditure (SASCI) scheme has helped states step up infrastructure spending over the last five years, but its full multiplier effect will only materialise if states contribute matching funds and the focus shifts further to tied grants, SBI Research said in its latest report.

Launched in October 2020 as a 50-year interest-free loan during the pandemic, SASCI has provided about Rs 4.5 lakh crore to states. The support has lifted state capital expenditure from 2.2 per cent of GDP in FY22 to 2.7 per cent in FY25 (RE), and the Economic Survey 2025-26 notes it helped keep overall state capex at around 2.4 per cent of GDP. Over time, the scheme has moved from a broad-...