Review meet: Finance minister asks ministries, CPSEs to front-load capex to stimulate growth

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June 05, 2021 4:45 AM

This was the fourth such review meeting held by the finance minister with various ministries and departments and second in a series of meetings scheduled for the infrastructure road map after the presentation of the Budget for FY22.

During the meeting, capital expenditure plans of various ministries and related CPSEs, status of implementation of budget announcements and measures to expedite infrastructure investment were discussed, according to a statement by the finance ministry.During the meeting, capital expenditure plans of various ministries and related CPSEs, status of implementation of budget announcements and measures to expedite infrastructure investment were discussed, according to a statement by the finance ministry.

Finance minister Nirmala Sitharaman on Friday impressed on various ministries to “front-load” their capital expenditure to stimulate growth, as she reviewed the progress of key infrastructure projects as well as the pace of capex with top government and PSU officials.

Amid fresh calls for demand stimulus, the minister also asked public sector enterprises to do their bit in boosting capex, stressing that enhanced capex will key to revitalising the economy in the aftermath of the pandemic.

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 in the oil and gas sector recorded a capex of Rs 5,610 crore in April, an increase of 25% over the year-ago period.

The government has budgeted capital expenditure at Rs 5.45 lakh crore for FY22, which is 26.2% higher than the revised estimate of FY21 and 34.5% larger than the budget estimate (BE) for the last fiscal. In contrast, at Rs 29.3 lakh crore, the BE of revenue expenditure for FY22 is 3% lower than the RE of FY21 and 11.4% higher than the BE of last fiscal.

The review came up on a day when the central bank trimmed its FY22 growth forecast for the country to 9.5% from 10.5% projected in April, factoring in the damage caused by the second pandemic wave that forced some states to announce localised lockdowns. Several agencies have trimmed their FY22 growth forecasts for India by up four percentage points to 8-10%.

This was the fourth such review meeting held by the finance minister with various ministries and departments and second in a series of meetings scheduled for the infrastructure road map after the presentation of the Budget for FY22.

Sitharaman directed various ministries to push expenditure on large projects to ensure that the achievement is commensurate with timelines. She also asked them to take up regular reviews of sector-specific projects with states concerned.

The minister also focussed on infrastructure expenditure pending by state governments and the private sector. The review also included government expenditure through extra-budgetary resources. Ministries, she made it clear, are to actively work on getting projects funded through innovative structuring as well as financing and provide all support to the private sector to bolster infrastructure spending. The ministries also need to explore the PPP mode for viable projects. She also asked various ministries, departments and CPSEs to ensure swift clearance of dues of MSMEs to help them cope with the impact of the pandemic and boost investments.

During the meeting, capital expenditure plans of various ministries and related CPSEs, status of implementation of budget announcements and measures to expedite infrastructure investment were discussed, according to a statement by the finance ministry.

The meeting was attended by the top bureaucrats of the ministries of finance, departments of public enterprises and power, chairman of the Railway Board and chiefs of CPSEs affiliated with the power and railway ministries.

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