The central government is considering raising long-term interest-free loans to states in the budget for 2026-27 for their capital asset creation, expecting the high multiplier effect of such productive spending to further bolster economic growth, a person familiar with the initial deliberations told ET. The allocation under the Special Assistance to States for Capital Investment (SASCI) scheme may be raised to Rs 1.8-2 lakh crore for 2026-27 from Rs 1.5 lakh crore budgeted for the current fiscal. “The multiplier effect of capital spending in states is often higher than that by central government entities.