New Delhi, July 12 -- Finance minister Nirmala Sitharaman on Friday urged states to make full use of the Centre's special assistance to states for capital expenditure (SASCE) scheme to drive economic growth by investing in employment-generating infrastructure and local development. "When you build capital assets, employment increases, core sectors benefit, and the multiplier effect is a lot more than just putting money in people's hands," Sitharaman said while speaking at a public event in Shillong. The minister said the central government aimed to empower states to invest in physical and social infrastructure post-Covid pandemic. "(The nation's) economic recovery is dependent on states' recovery as well," she added. Introduced in 2020-21 (FY21), the Centre's 50-year interest-free capex loan scheme has been crucial to driving capital spending by states and stimulating the economy post-pandemic. For FY26, the Centre has allocatedRs.1.5 trillion for these loans, aiming to boost public infrastructure spending and support state-level capital projects. Of theRs.1.5 lakh crore earmarked for FY26, around 60% will be unconditional or linked to infrastructure spending, while the remaining 40% will be tied to reforms that states. Union territories were included under the scheme in FY26. Sitharaman said that these loans to states go beyond the constitutionally mandated transfers under the Finance Commission and reflect Prime Minister Narendra Modi's deeper understanding of states' development challenges. "These funds come without interest, and repayment is due only after five decades, and even that may be waived. The focus is on creating long-term public assets, not short-term handouts," the minister said....