FM seeks PSUs' help to boost economy

Meets heads of major state-run companies, to check if they'll be spending their full capex budget

Facing twin problems of slow economic  growth and lack of fiscal space, Finance Minister P Chidambaram on Friday asked heads of public sector units (PSUs) to meet their capital expenditure plans, pegged at around Rs 1.4 lakh crore for 23 major enterprises in 2013-14, to spur the subdued activity in the economy. And, to meet their commitment  on dividends.

The minister met the chairmen of a host of blue-chip PSUs, such as Oil & Natural Gas  Corporation, Indian Oil, GAIL India, Steel Authority of India,  NTPC and Coal India.

After the meeting, he told reporters, “Most of the PSUs will achieve their capex plan. Some half a dozen might not. We will revisit those cases in January.”

Most chairmen assured the minister of meeting the capex target for the current year.     

ONGC chairman Sudhir Vasudeva said, “The minister was fully satisfied by the performance of ONGC. Our H1 (first half) capex target was a little over Rs 14,000 crore. We have spent 99.3 per cent. We will spend this fiscal year's capex plan of Rs 35,000 crore. We have cash of around Rs 13,000 crore.”    

Similarly, SAIL was confident of achieving its capex target, Chairman C S Verma said. “We have met 87 per cent of the target of the first half of the year. We will meet the whole year target, which is Rs 11,500 crore.”

Currently, excess funds of some PSUs are estimated at around Rs 2.8 lakh crore.

“Obviously, the surpluses of public sector enterprises cannot lie in a bank. The surpluses have to be invested. Either they invest or they give it to somebody who can invest it,” Chidambaram had said in an interview with the Press Trust of India.

For 2013-14, the Prime Minister's Office set the capex target for main PSUs at Rs 141,912 crore, which is 1.24 per cent of the estimated gross domestic product for the year. The investment will have a multiplier impact on growth.

The capex investment target for 17 central public sector enterprises was set at Rs 141,389 crore in 2012-13, of which these units made an actual investment of Rs 1,11,913 crore, almost 80 per cent of the goal. Even then, the country’s economic growth declined to five per cent in 2012-13, lowest GDP expansion in 10 years. This year, most independent analysis did not expect the economy to grow even this much. The economy expanded 4.4 per cent in the first quarter of 2013-14, slowest in four years.

At a time, when the government cannot provide a stimulus to the industry as it faces a challenge in restricting the Centre's fiscal deficit at 4.8 per cent of GDP, the investible surplus of PSUs can come to the aid of a sluggish economy.

A higher dividend by PSUs would also help the government narrow its fiscal deficit. This had widened to 75 per cent of the year’s budget estimate in only the first five months of this financial year. The government expects to raise Rs 73,866 crore from dividends this year, against Rs 55,443 crore last year.

 

"Dividend payments by PSUs will not be less than last year's. In no case will we accept dividend less than last year's," Chidambaram said. 

 

The Ministry, according to officials, is hopeful of meeting the dividend receipt target in the current fiscal and has not sought any special dividend. However, they said the situation would be reviewed in January. End 

 

Meanwhile, the Central  Board  of Excise and Customs  held a review meeting of indirect tax collections so far and asked field formations to  take administrative steps to meet the budget target of Rs 5.65 lakh crore for 2013-14. 

ONGC	Rs 35,000 crore
NTPCil	Rs 20,200 crore
SAIL	Rs 11,500 crore
Coal India Ltd	Rs 5,000 crore

Source:Respective Companies