NEW DELHI: The Central Public Sector Enterprises (CPSEs) are likely to miss their capital expenditure (capex) target this financial year as many of them have not spent even 50 per cent of the budgeted target. According to the sources in the finance ministry, Finance Minister Nirmala Sitharaman has expressed concern over low capex utilisation of PSUs. With just one more month left for FY21 to end, she has also asked them to aggressively work on it.
“Because of the coronavirus pandemic, most PSUs could not spend their capital as required. Recognising the difficulty, the finance ministry has asked them to spend at least 75 per cent of the capital outlay for FY21 by March 31. However, even this seems difficult as, going by the latest update, many PSUs have not yet achieved half of their target. FM has asked PSUs to work on the targets,” a senior finance ministry official told TNIE.
The finance minister, in her last review meeting with the heads of public sector enterprises, has encouraged the CPSEs to perform better to achieve their targets and has specifically asked them to ensure that the capital outlay for FY21 is spent properly and within time. In a video conference meeting held with CMDs of 13 petroleum-sector CPSEs and Coal India on October 19, finance minister Nirmala Sitharaman highlighted that capex performance was 32 per cent of FY21 target in H1 FY21 versus 40 per cent a year ago. She had asked the PSU heads to resolve issues at ground level.
But to no avail as despite the nudge, their performance remains not up to the mark. Besides, there was separate instruction from the Prime Minister’s Office which had directed the CPSEs to double their capex to Rs 2 lakh crore in FY21 from the initial target of Rs 1 lakh crore. In addition, at the September review meeting, capex targets of petroleum and coal CPSEs were scaled up to Rs 3 lakh crore for FY22. The combined capex of CPSEs with annual budgets above Rs 500 crore turned out to be Rs 4.41 lakh crore or 90 per cent of the target in FY20.