To tackle the slump in economic growth, the government said that it will make major borrowings of the second half of the financial year, during the next 3 months till January. The economic affairs secretary said that the government expects Rs 25000 cr additional capex by PSUs in FY18. Finance Minister Arun Jaitley today reviewed the capex plan of state-owned enterprises and asked them to step up spending with an aim to shore up the economy as growth hit a three-year low of 5.7 per cent.
In the capex plan review, Subhash Chandra Garg, Economic Affairs Secretary said that the government will be sticking to FY18 borrowing target of Rs 2.08 lakh crore, as the government doesn’t foresee additional borrowing at this point in time. He added, “All PSUs are on track with capex plans; total budgeted borrowing is Rs 5.80 lakh crore for H1; have done Rs 3.72 lakh crore in H1.” The central public sector enterprises (CPSE) have been asked to stick to the capex target for the current fiscal.
PTI reported Bharat Electronics Ltd (BEL) Chairman and Managing Director M V Gowtama as saying, “Already year on year capex has been increased by CPSEs. The government is ensuring we are on track… We have already given ambitious projects, they (government) are reviewing it.” In his address, Subhash Garg said that government will hold another capex review with PSUs in November.
Economic growth in India has slackened for six consecutive quarters from the beginning of 2016, with India losing the fastest growing economy tag to China for the second straight quarter. For the first quarter ended June, economic growth hit a three-year low of 5.7 per cent.
Besides the falling GDP growth rate, exports are facing strong headwinds and the industrial growth is the lowest in five years. Current account deficit (CAD) — the difference between inflow and outflow of foreign exchange — rose to 2.4 per cent of GDP in April-June.