Union Minister for Finance & Corporate Affairs Ms Nirmala Sitharaman, in a video conference with some Central public sector enterprises (PSE), encouraged them to spend their capital outlay for FY21 properly and within time.
The Union finance minister was interacting with secretaries of ministries of civil aviation and steel, and the Chairman of the Railway Board along with CMDs of seven Central PSEs of these ministries through a video conference on July 23, 2020.
The purpose of the meeting was review the capital expenditure programme of these entities in this fiscal year. This was 2nd meeting in the ongoing series of review meetings that the finance minister is conducting with various stakeholders to accelerate the economic growth in the background of COVID-19 pandemic.
The FM has asked these seven CPSEs to ensure that 50 per cent of their FY21 capital outlay should be spent by September 30, 2020.
The combined capital expenditure (capex) of these seven CPSEs for FY21 is Rs.24,663 crore. In FY20, as against the capex target of Rs.30,420 crore, the achievement was Rs.25,974 crore. This translates to an achievement of 85 per cent. In the first quarter of FY20 (April 2019 to June 2019), the achievement was Rs.3878 crore or 13 per cent. The corresponding achievement for the first quarter of FY21 (April 2020 to June 2020) was 14 per cent with the capex standing at Rs.3,557 crore.
It may be mentioned that typically capital expenditure programmes accelerate during the second half of the year, and the maximum capital expenditure is seen during the last quarter (January to March) of the fiscal year.
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 provided to them for the FY21 is spent properly and within time. Ms Sitharaman said that better performance of CPSEs can help the economy in a big way to recover from the impact of COVID-19.
Capex review meeting of CPSEs to be held every month: FM
The minister also asked the secretaries concerned and the Chairman Railway Board to closely monitor the performance of CPSEs in order to ensure capital expenditure of 50 per cent of capital outlay by the end of the second quarter of FY21 (by September 30, 2020) and make appropriate plan for it.
Ms Sitharaman stated that unresolved issues should be flagged immediately to the DEA/DPE/DIPAM for immediate action on them. The Finance Minister said that she will hold such review meetings on the performance of capex of CPSEs every month.
The CPSEs discussed constraints being faced by them especially due to COVID-19 pandemic. The Finance Minister stated that extraordinary situation requires extraordinary efforts and with collective efforts, we will not only perform better but also help the Indian economy to achieve better results.
Note: DEA = Department of Economic Affairs; DPE = Department of Public Enterprises; DIPAM = Department of Investment & Public Asset Management
