FM urges CPSEs to meet 75% of capex target by Dec-end2 min read . Updated: 20 Oct 2020, 07:31 AM IST
- The finance minister also said that capital expenditure of CPSEs needs to be scaled up for the current and the next fiscal year as it a ‘critical driver for economic growth’.
New Delhi: Finance Minister Nirmala Sitharaman on Monday nudged central public sector enterprises (CPSEs) to meet three-fourth of the capital expenditure target by the third quarter of the current fiscal to help the economy recover from the covid-19 induced slowdown.
While reviewing the performance of CPSEs, the finance minister also said that capital expenditure of CPSEs needs to be scaled up for the current and the next fiscal year as it a "critical driver for economic growth".
Sitharaman met secretaries of the ministries of petroleum and natural gas, coal ministry, along with the heads of 14 CPSEs belonging to these ministries via video conference, to review the capital expenditure in the current fiscal year. This was the fourth such meeting with the finance minister to review the progress in capex backdrop of the covid-19 pandemic.
In the first six months of the current fisca year, little less than a third of the capital expenditure of these 14 CPSEs was met. The target for 2020-21 is ₹1.15 trillion, according to finance ministry data. The target for 2019-20 was ₹1.11 trillion for these 14 CPSEs.
“The finance minister asked the concerned secretaries to closely monitor the performance of CPSEs in order to ensure the capital expenditure to the tune of 75% of the capital outlay by the end of Q3 of FY 2020-21 and make appropriate plan for it," an official statement said, adding that the minister called for more co-ordinated efforts at the secretary-level of concerned ministries and heads of CPSEs to achieve the targets.
“While mentioning the significant role of CPSEs in giving a push to the growth of the Indian economy, the finance minister encouraged the CPSEs to perform better to achieve their targets and to ensure that the capital outlay for FY 2020-21 is spent properly and within time," the statement said.
The finance minister has maintained that the capital expenditure has a high multiplier effect and has the potential to increase the current as well as future gross domestic product (GDP), making debt more sustainable.
Last week, Sitharaman said an additional budget of ₹25,000 crore will be provided as capital expenditure to develop roads, defence, water supply, urban development and domestically produced capital equipment to boost economic growth. This will be in over and above the ₹4.13 trillion provided for in the Union Budget for 2020-21. She also said that the government will offer ₹12,000 crore special interest-free 50-year loan to states, exclusively for capital expenditure.