New Delhi: To revive sagging economy, the finance ministry will hold meeting with heads of central public sector enterprises (CPSEs) on Friday to impress upon them the need to expedite capital expenditure.
The government has a capital expenditure plan of Rs 3.3 lakh crore during the current financial year. These include expenditure by the Ministry of Railways and Road Transport. Besides, various CPSEs have earmarked funds for expansion and capacity enhancement.
According to official sources, the finance ministry will review the progress made by various CPSEs with regard to their capital expenditure envisaged for the current fiscal. Since the investment from the private sector is not forthcoming, the sources said the government and CPSEs are the biggest spenders that play a major role in boosting liquidity and demand.
The meeting, to be chaired by Expenditure Secretary GC Murmu, will also review pending payment issues, the sources said.
This is going to be part of the series of a meeting being held at the finance ministry to find ways to reinvigorate the sagging economy, which hit over 6-year low of 5 per cent during the first quarter of the current financial year.
Meanwhile, the ministry on Thursday reviewed capital expenditure being done by various ministries. “Secretary DEA (Department of Economic Affairs) Shri Atanu Chakraborty and Secretary Expenditure Shri GC Murmu reviewed today capital expenditure being done by Ministries of Road Transport & Highways, Railways, Telecom and Housing & Urban Affairs,” the ministry said in a tweet on Thursday.
The country’s economic growth has slumped for the fifth straight quarter to an over six-year low of 5 per cent in the three months ended June as consumer demand and private investment slowed amid deteriorating global environment.
Finance Minister Nirmala Sitharaman announced a raft of measures, including rollback of super-rich tax on foreign and domestic equity investors, exemption of start-ups from ‘angel tax’, a package to address distress in the automobile sector and consolidation of the banking sector. The automobile sector is facing the worst crisis in about 20 years and reports suggest job losses in thousands.
In the real estate space, the number of unsold homes has increased while fast-moving consumer goods companies have reported a decline in volume growth and lending to job-creating MSMEs (micro, small and medium enterprises) by banks has actually slipped.
The minister had also said the issue of delayed payments from CPSEs to project developers will be monitored by the Department of Expenditure and the entire process will be reviewed by the Cabinet Secretariat.
Regarding contractual disputes by the government and CPSEs, she had said the government has decided to pay 75 per cent of the due upfront, provided arbitration is in favour of the claimant.