NEW DELHI, Nov. 2 -- The Centre is likely to raise the allocation for its 50-year, interest-free loan scheme for states - the Special Assistance to States for Capital Investment (SASCI) - by up to 15% in the next financial year, two people aware of the matter said. This is despite only about a third of this year's Rs.1.5 trillion outlay being utilized, they added.

Disbursements under the scheme touched roughly Rs.50,000 crore by the end of October, against the annual target of Rs.1.5 trillion, the people mentioned above said. The remaining funds are expected to be released in the second half of FY26 as more states complete reform-linked milestones required to access their share.

The central government plans to accelerate disbursements i...