NEW DELHI: Finance Minister Nirmala Sitharaman has asked all central public sector enterprises (CPSEs) to spend 75 per cent of their capex, including share buybacks, by the end of the quarter ended December 2020. The move is an effort to give a boost to the flagging economy.
The planned capital expenditure (capex) of all 14 CPSEs is estimated at Rs 1.15 lakh crore, and since the government is parched for funds, accelerated spending by CPSEs will ensure that investment remains intact in major infrastructure projects.
In a virtual meeting held with the heads of all CPSEs on Monday, Sitharaman asked officials to closely monitor their CPSE’s performance and ensure that they spent 75 per cent of their total capital outlay by the end of December. Finance ministry officials had also obsevered that the CPSEs were not spending enough.
According to sources who were present in the meeting, up to the first half of the year (H1), these PSUs have spent around Rs 37,423 crore, which was just 32 per cent of their total planned capex. In FY 2019-20, against the capex target of Rs 1,11,672 crore, the 14 CPSEs had achieved Rs 1,16,323 crore, i.e. 104 per cent.
During the meeting, while the CPSE heads said that the lockdown had caused delays in investment decisions, Sitharaman requested the respective secretaries to ensure that the CPSEs spent their capital fully, and in time bound manner.
Finance ministry officials also suggested that the companies should consider exercising the option of buying back shares if they are not able to meet the targets. Sitharaman added that a better performance by CPSEs can help the economy to recover from the impact of Covid-19.
“This was the fourth in the ongoing series of meetings that the finance minister is having with various stakeholders to accelerate economic growth,” said an official statement.