The Centre has allocated ₹3,000 crore under the States and Areas-Specific Capital Investment (SASCI) scheme, prioritizing fiscally disciplined states. States with strong debt management, revenue growth, and adherence to Fiscal Responsibility and Budget Management Act norms receive preference. The scheme aims to incentivize responsible fiscal behavior while supporting capital expenditure in infrastructure and development projects. Selection criteria include debt-to-GSDP ratios, revenue collection efficiency, and compliance with fiscal deficit targets.

The SASCI incentive pool represents a paradigm shift from equal distribution to merit-based allocation of central funds. States are now evaluated on fiscal parameters like debt sustainability, revenue mobilization capacity, and adherence to FRBM guidelines. This approach encourages competitive federalism where states compete for resources through better governance rather than political leverage. The scheme addresses India's growing debt concerns—combined state debt reached 31% of GDP in 2023-24. By linking fund access to fiscal discipline, the Centre aims to prevent moral hazard while maintaining growth momentum. States with higher debt-to-GSDP ratios may face reduced access, creating pressure for fiscal consolidation. The policy reflects global best practices where multilateral institutions link aid to governance indicators. However, it raises federalism concerns as financially weaker states, often due to structural disadvantages, may receive less support when they need it most. The scheme's success depends on transparent criteria, regular monitoring, and ensuring that fiscal discipline doesn't compromise essential social spending or development priorities.