FM Sitharaman asks departments to prepare capex plans for next 4 quarters

The finance ministry has asked all central government departments to come up with a road map for their capital expenditure requirements for the next four quarters, Finance Minister Nirmala Sitharaman said on Friday after meeting secretaries and financial advisors of various ministries to review their capex plans.

Sitharaman will meet heads of non-banking state-owned companies to review their capital spending plans as well, on Saturday.

“I have asked them to give us well in advance their plans for capital spending for the next four quarters, so that there is a clear commitment on where the capex will be targeted, and what they need. Within the next week they should be coming back to the expenditure secretary with their plans,” Sitharaman said.

The minister was briefing the media after her meeting with central government ministries and departments. At the briefing, Expenditure Secretary Girish Murmu and Sitharaman said ministries, PSUs, and government agencies had cleared around Rs 40,000 crore out of the Rs 60,000 crore pending dues to suppliers and contractors, and the remaining amount, which is not stuck in litigation, would be cleared in the coming few days.

“The government should not sit on overdue payments. The money should go to people who have been waiting for it. The money should reach the ground. The idea here is to ensure there are no outstanding dues to suppliers of goods and services,” Sitharaman said. A number of micro, small and medium enterprises (MSMEs) have complained that their payments were not being cleared in time by different wings of the government.

The secretary further said that most infrastructure ministries had reached 50 per cent of their capex target for the current fiscal. Murmu also said the government's capital expenditure was on track and the Budget estimates would be met. The 2019-20 Budget estimates the Centre’s capex at Rs 3.39 trillion and grants for creation of capital assets at Rs 2.07 trillion. Murmu said that of the total Rs 5.45 trillion, some Rs 2.18 trillion had been deployed till date.

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Total capex till August under capital head has been reported at Rs 1.36 trillion (40.28 per cent of full year estimates) and that under grants for creation of capital assets has been reported at Rs 0.82 trillion (39.7 per cent), said an official statement after the briefing.

“Secretaries and 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 trillion. The minister directed that the capital expenditure must be monitored on a monthly basis to ensure that there are no slippages,” the statement said.

Replying to queries from reporters, Sitharaman said that government would reconcile fiscal deficit numbers closer to the end of the financial year and that 90 per cent of goods and service tax overdues had been cleared.

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She also said that the government was talking with the Reserve Bank of India and banks to resolve the issue of arbitration payments. Banks seek guarantee in form of 75 per cent of the arbitration award, and interest has to be paid by the government department stuck in arbitration dispute on top of it.