Capex on track, Ministries told to clear pending dues

Last Updated: Sat, Sep 28, 2019 15:21 hrs
Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Friday said the government's capital expenditure was on track and asked the ministries and the PSUs to clear all non-litigation dues at the earliest to keep the investment and consumption cycles active while stating close to 90 per cent of the outstanding GST dues have been cleared.

"The government's capital expenditure is on track and Budget estimates would be met. The consumption was on rise and credit offtake was growing, which together should result in bouyancy in the economy", she said at a media briefing. "Total capex spend is at 42 per cent till August-end", said Expenditure Secretary G.C. Murmu, who was also present at the media briefing.

The minister also asked the PSUs and ministries to share their capex plans for next four quarters as the government looks to push consumption and demand through spending push.

"I have called for ministries to provide their capex plans for the next four quarters. The details are expected to come within a week", she added.

"At this stage, my intention is to make sure that government does not sit on payments which are due, government does not sit on CapEx which it had planned," said the minister while addressing media after the meeting.

"The ministries and PSUs will clear all the non-litigation related dues. The ministries have cleared most of the dues of goods and services to suppliers, mostly MSMEs, and the remaining payments will be done in the next few days," she told media after she met 21 major infra spending ministries on Friday.

Murmu said out the total outstanding dues of about Rs 60,000 crore, Rs 40,000 crore has been cleared. The government expenditure is on track and we have asked ministires to release payments ina timely manner. Most infrastructure ministries have reached 50% of their capex target for the current fiscal, he added.

Sitharaman also said that close to 90 per cent of the outstanding GST dues, as of August 23 when she first mentioned GST refunds, has been cleared while asserting consumption will be strong during the festive season.

The minister will also meet the heads of public sector enterprises on Saturday. "Tomorrow, we'll have a separate meeting with different agencies of public sector undertakings and other agencies which come under different ministries," she said.

Some Ministries, which include Ministry of Health and Family Welfare and Ministry of Human Resource Development, receive grant-in-aid from the Budget but a large part of the expenditure is made to create capital assets such as IITs, AIIMSs etc.

The meeting was attended by Secretaries and Financial Advisors of all major Ministries.

To a query on the fiscal discipline with rebate in corporate tax and expenditure, the minister said the government will reconcile fiscal deficit numbers later. 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.

Another meeting is scheduled tomorrow with the Maharatnas and Navratnas. 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 asked 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 (adding these two).

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 (Extra Budgetary Resources), 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,(Gross Budgetary Support) 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 (Government e-Marketplace ) platform were also reviewed. For the purchases made by the Central government departments total payment of Rs 6,533.61 crore has been released while state governments have released payments of Rs 4851 crore.

Ministries/ Departments were advised to expeditiously clear payments since large number of vendors on GeM are MSMEs. Murmu also said CPSEs had released payment of Rs 20,157 crore in the last three months. He stated that Department of Expenditure would constantly monitor the progress of large infrastructure projects for the Ministries as well as the CPSEs and further follow-up meetings would be held.

He said meetings with the Ministries/Departments to assess RE for 2019-20 and the BE for 2020-21 would be initiated from the middle of October 2019. ministries/departments were asked to make accurate assessment of resource requirements and make projections. This would enhance allocative efficiency.