At a review meeting, Finance Minister Nirmala Sitharaman said that better performance of CPSEs can help the economy in a big way to recover from the impact of COVID-19.

FM Nirmala Sitharaman in a pensive moodFile image
Money Coronavirus Friday, July 24, 2020 - 16:26

The government has asked Public Sector Undertakings (PSUs) to complete all their planned capital expenditure (capex) for FY21 on time and become vehicles of growth for the economy that has been hit by the coronavirus pandemic. With private investment on a standstill, the government wants companies administered by it to change the mood in the country by stepping up expenditure and generating economic activity that results in income generation and job creation.

At a review meeting held by the Finance Minister Nirmala Sitharaman on Thursday with Secretaries of Ministries of Civil Aviation, Steel, and the Chairman Railway Board along with the CMDs of 7 CPSEs belonging to these Ministries, the Finance Minister said that better performance of CPSEs can help the economy in a big way to recover from the impact of COVID-19.

In this regard, she said it is important that CPSEs ensure that capital outlay provided to them for FY21 is "spent properly and within time".

Sitharaman asked secretaries to closely monitor the performance of CPSEs in order to ensure capital expenditure to the tune of 50 per cent of capital outlay by Q2 2020-21.

She said that to achieve this planning should be done in advance and all unresolved issues should be brought before the ministry for immediate solution.

The concern this year is that sluggish economic activities on account of COVID-19 and sagging demand conditions may also push PSUs to step back on their investments.

In FY 2019-20, against the CAPEX target of Rs 30,420 crore for the 7 CPSEs, the achievement was Rs 25,974 crore i.e. 85 per cent. In Q1 (FY 2019-20) achievement was Rs 3,878 crore (13 per cent) and achievement of Q1 (FY 2020-21) has slowed down to Rs 3,557 crore (14 per cent). CAPEX target for 7 PSUs for 2020-21 is Rs 24,663 crore.

This review meeting was held as part of the series of meetings that the Finance Minister is having with various stakeholders to accelerate the economic growth.

The Finance Minister also stated that extraordinary situation require extraordinary efforts and with collective efforts, "we will not only perform better but also help the Indian economy to achieve better results."

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