Early indications of capex performance by the most significant central public sector enterprises (CPSEs) in the energy sector indicate they made good start in 2021-22.
Among them, a dozen CPSEs in the oil and gas sector recorded a capex of Rs 5,610 crore in April, an increase of 25% over Rs 4,475 crore reported in the corresponding month a year ago. These CPSEs achieved 5.4% of their FY22 capex target in April, compared with 4.5% of the respective target in the year-ago month.
These dozen CPSEs have set a capex target of Rs 1,04,620 crore in 2021-22 compared with Rs 98,522 crore targeted in 2020-21. With a constant prodding by the finance minister Nirmala Sitharaman, the provisional actual capex of these CPSEs came in at Rs 1,06,642 crore in 2020-21 or 108% of the target.
In April 2021, Oil and Natural Gas Corporation (ONGC), the top CPSE player in oil and gas exploration, has achieved a Rs 1,893-crore capex or 6.4% of its 2021-22 target of Rs 29,800 crore compared with 8.5% of the respective target in the year ago month.
Refiner-cum-retailer Hindustan Petroleum Corporation (a subsidiary of ONGC), which has lined up a Rs 14,500 crore capex plan for 2021-22, achieved 9.7% of that in April this fiscal compared with a paltry 1% of the relevant target achieved in the year-ago month.
In April this fiscal, another refiner-cum-retailer Indian Oil Corporation achieved 3.5% of its 2021-22 capex target of Rs 28,547 crore compared with 1.7% of the target a year ago.
Last year, Sitharaman was pressing the large and relatively cash-rich CPSEs to accelerate their capital spending and achieve 50% of the annual capex targets, in the first half itself. The idea was to soften the blow to the economy from the sharp drop in private investments and slashing of capital expenditures by revenue-starved states after Covid broke out in 2020-21.
Despite facing difficulties in executing projects due to Covid-19, the combined capex by 37 large CPSEs and departmental undertakings – all with annual capex budgets above Rs 500 crore – were Rs 4.6 lakh crore in 2020-21. This was 92% of the Rs 5-lakh-crore target for the year and 4.3% higher than the capital spending by these entities in the previous year.