In a significant policy shift, the Indian government has tied part of the ₹2 lakh crore (approximately $240 billion USD) allocation under the Special Assistance to States for Capital Investment (SASCI) scheme to fiscal discipline. This move aims to encourage states to improve debt management and enhance transparency in fiscal reporting. The Department of Expenditure has finalized modalities for ₹1.75 lakh crore of this allocation, introducing fiscal benchmarks and reform-linked incentives. Notably, a dedicated corpus of ₹25,000 crore is set aside for nine hill states, which face greater infrastructural challenges. States will receive 50-year interest-free loans, with ₹75,000 crore designated as untied funds for capital projects. The scheme also allocates ₹13,000 crore for developing digital public infrastructure in agriculture, enhancing transparency in minimum support prices and fertilizer distribution. Additionally, ₹10,000 crore is available for states to fund their portions of central sponsored schemes. The allocation for the current fiscal year includes an incentive of ₹3,000 crore for states demonstrating fiscal discipline, with potential increases in future years.