FM Arun Jaitley has asked central public sector enterprises (CPSEs) to set aside an additional Rs25,000 crore for capex in 2017-18 to revive investment demand in the Indian economy
New Delhi: The finance ministry has prodded central public sector enterprises (CPSEs) to declare “liberal dividends" to the government and set aside an additional Rs25,000 crore for capital expenditure this fiscal year to revive investment demand in the economy.
Finance minister Arun Jaitley on Thursday reviewed the capital expenditure programmes and the status of dividend distribution by CPSEs in the petroleum, defence, power, road transport, railways, coal, mines, steel and atomic energy sectors.
Economic affairs secretary Subhash C. Garg told reporters that the Rs25,000 crore capital expenditure will be over and above the Rs3.85 trillion budgeted for 2017-18.
Garg said the capital expenditure plan for the fiscal year is on track. He clarified that this additional amount is not part of the stimulus package that the government is contemplating.
“Finance minister, while appreciating the commitments of the ministries and CPSEs, assured that government would make available adequate resources, but no slackness under any circumstances would be acceptable," a finance ministry statement said.
Jaitley will again review the capital expenditure programme of the government at the end of November or in early December.
The finance ministry also asked the CPSEs with low or no debt on their balance sheet to raise more debt and not rely entirely on cash and free reserves for funding new investments and capital expenditure.
“The CPSEs which have free reserves and surplus cash were asked to consider declaring liberal dividends so as to promote more productive use of such resources for financing much-needed physical and social infrastructure," a finance ministry statement said.
Finance secretary Ashok Lavasa advised the CPSEs to release outstanding payments quickly to help improve liquidity.
“Secretary, economic affairs advised the CPSEs to consider raising more resources through innovative financing arrangements like infrastructure investment trusts, toll-operate-transfer, and monetization of assets to undertake more projects of capital nature," the statement added.
Economic growth in the quarter ended June slowed to 5.7%, the slowest pace in three years, prompting the government to contemplate stimulus measures.
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