Economy

Finance Minister asks top CPSEs to front-load their capex plans

KR Srivats New Delhi | Updated on September 28, 2019 Published on September 28, 2019

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman chairs a meeting on capital expenditure, pending payments, arbitration of major CPSUs on Saturday. – Photo: Twitter/PTI

The Finance Minister Nirmala Sitharaman on Saturday asked 34 top Central Public Sector Enterprises (CPSEs) to “frontload” their CAPEX plans for the fiscal as part of Government's efforts to push more economic activity in the country.

These 34 CPSEs have also been asked to submit CAPEX plans for the next four quarters by October 15, Nirmala Sitharaman told reporters after meeting the chief executives of these state-owned enterprises at North Block here.

The idea is to front load CAPEX plans as much as possible, Sitharaman said."We are just pulling them up to say that if they have not spent what they had budgeted for in the first half, then get going with it.  If you have not done the first half properly complete it now and for the next half front load it", she said.

Bank Guarantee

Sitharaman had in her meeting with the chief executives of CPSEs tried to understand as to why bank guarantees are a hitch or hurdle in Government paying 75 per cent post arbitral awards amount."I will request RBI to help and sit with the Finance Secretary to sort this out and overcome the difficulties in bank guarantees", she said.On payments of dues to suppliers, Sitharaman said that from the Government side every attempt to get every payments out to those to whom it belongs is almost complete.

In the first quarter this fiscal, GDP growth had slowed to a six-year low of 5 per cent. Sitharaman has been taking a series of meetings to hear stakeholders and address their concerns, including liquidity, timely payments and export promotion besides taxation issues.

eMarketplace procurement

Meanwhile, Sitharaman also asked these CPSEs to submit reasons as to why they were procuring goods and services to the tune of about ₹60,000 crore outside the Government eMarketplace (GeM) portal when these goods and services were already available through the portal. They have to furnish the reasons by October 15.

On their part, these 34 CPSEs promised that were on track to spend ₹1.53 lakh crore CAPEX budgeted for the fiscal.

The whole effort of today’s meeting is to ensure that the “momentum” of CAPEX continues and there is no delay in payment of dues to suppliers, said Rajiv Kumar, Finance Secretary.

Finance Minister also said that she had asked CPSEs to set up a separate portal where suppliers and the Government can track the status of payments.

Expenditure Secretary Girish Chandra Murmu said that all central PSEs are set to spend ₹4 lakh plus crore ( including IEBR) this fiscal.

The 34 PSEs today committed to spending ₹50,259 crore till December 2019 and another ₹54,700 crore in the last quarter.

Already till August 2019, these CPSEs have spent ₹48,077 crore, Rajiv Kumar said.

Sitharaman has also directed officials to go on a drive to clear payments due to various suppliers to the CPSEs.

Arbitration

The Finance Minister has also called for a review of all the post-arbitration counterclaims so that it does not get vitiated and “we get a picture of where we are”.

She has asked the 34 CPSEs to submit the picture of the lifespan of their arbitrations—when did it start, how long is it dragging and why is it remaining inconclusive and whether post-arbitration issues protected.

Murmu said that all the 34 CPSEs have cumulative arbitration amounts of Rs 49,000 crore and the counterclaims on them are around ₹43,000 crore.

Published on September 28, 2019
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