FM Nirmala Sitharaman reviews capital expenditure

Meeting was attended by Secretaries and Financial Advisors of all major Ministries

Union Minister for Finance & Corporate Affairs Nirmala Sitharaman today, 27 September 2019 reviewed the position of Capital Expenditure (CAPEX) of select Ministries having large outlays. This was done to assess the position of expenditure in the Government, especially capital expenditure. The meeting was attended by Secretaries and Financial Advisors of all major Ministries.

To address the growth challenge, Government has been holding wide ranging stakeholder consultations and has taken several steps to provide boost to the economy. Today's meeting was in continuation of a series of meetings held by Secretary (Expenditure) to review CAPEX as well as to ensure that due payments to contractors, GeM dues and MSME dues are cleared.

Expenditure, both revenue and capital, made by the Union government provides a major boost to aggregate demand. Total expenditure of the Central government for FY 2019-20 through the budget is Rs 27.86 lakh crore. Of this Capital expenditure is budgeted at Rs 3.38 lakh crore (12.2%) in BE 2019-20 as against revenue expenditure of Rs 24.27 lakh crore (87.8%).

During review, the Finance Minister impressed upon the Ministries/ Departments that regular payments must be cleared expeditiously as it spurs investment cycle. She emphasised that all efforts must be made to ensure that outstanding payments are cleared before the festival season.

Apart from the budgeted allocation under capital head of Rs. 3.38 lakh crore for 2019-20, the total amount given to Ministries/ Departments as Grant in Aid (GIA) for creation of capital assets amounts to Rs. 2.07 lakh crore. Thus the total amount available for CAPEX for 2019-20 is Rs. 5.45 lakh crore. Total CAPEX till August under capital head has been reported at Rs. 1.36 lakh crore (40.28%) and that under GIA has been reported at Rs. 0.82 lakh crore (39.7%) totalling Rs. 2.18 lakh crore (40%).

Apart from Gross Budgetary Support (GBS), Ministries have been sanctioned Rs. 0.57 lakh crore EBR, out of which Rs. 0.46 lakh crore has been approved. EBR expenditure also adds to the overall capital expenditure of the Government.

While the capital expenditure till August 2019 is around 40% at Rs. 2.18 lakh crore from GBS, the Finance Minister also took stock of the expenditure plans for the next two quarters and directed that Secretaries and the Financial Advisors must closely monitor the execution of capital works and ensure that payments are released on time as to achieve the targeted capital expenditure of Rs. 5.45 lakh crore. She directed that the capital expenditure must be monitored on a monthly basis to ensure that there are no slippages.

Purchases made on GeM platform were also reviewed. For the purchases made by the Central government departments total payment of Rs. 6533.61 crore has been released while state governments have released payments of Rs. 4851 cr. Ministries/ Departments were advised to expeditiously clear payments since large number of vendors on GeM are MSMEs.

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