FM Nirmala Sitharaman asks seven CPSEs to spend 50% capex in H1

This is because the government looks to maintain the pace of capital and infrastructure projects in a bid to soften the economic blow from the Covid-19 pandemic

Union Finance Minister Nirmala Sitharaman on Friday asked seven state-owned companies under five key ministries to spend 50 per cent of their capital outlay for the year before October 1. 

This is because the government looks to maintain the pace of capital and infrastructure projects in a bid to soften the economic blow from the coronavirus (Covid-19) pandemic.

Finance ministry officials are confident that in spite of the hit on revenues, the Centre will meet its capital expenditure target of Rs 4.12 trillion this fiscal year.

According to an official statement, Sitharaman held a video conference meeting with secretaries of the ministries of shipping, road transport, urban affairs, defence and telecom, as well as the seven PSUs under these departments.

“This was the third in the ongoing series of meetings that the finance minister is having with various stakeholders to accelerate the economic growth in the background of Covid-19 pandemic,” the statement said.

The combined capex target for the seven central public sector enterprises (CPSEs) for FY21 is Rs 1.25 trillion. Sitharaman asked the concerned secretaries to closely monitor the performance of CPSEs and ensure that they spend 50 per cent of their capex by the end of the first half.

Till July end, these PSUs spent around Rs 45,105 crore. 

This means that for August and September, they will have to spend Rs 17,307.50 crore to reach Rs 62,412.50 crore, which is exactly half of their FY21 capex target. In FY2019-20, against a capex target of Rs 1.3 trillion for the seven CPSEs, they spent nearly Rs 1.15 trillion or nearly 88.37 per cent, the statement said.