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Achieve 75% of capital expenditure by Dec, PSUs told

The combined capital expenditure target for the 14 central public sector enterprises for the current fiscal year is Rs 1.15 lakh crore
Last Updated 20 October 2020, 01:08 IST

The central government on Monday asked 14 state-owned companies to achieve three-fourth of their capital expenditure for the fiscal year 2020-21 by the end of December, a move that may help soften the economic blow caused by the pandemic.

The combined capital expenditure target for the 14 central public sector enterprises for the current fiscal year is Rs 1.15 lakh crore.

Union Finance Minister Nirmala Sitharaman asked the ministries concerned to ensure at least 75% capital expenditure is incurred before the beginning of January-March quarter.

Sources said the government had asked firms to either meet their targets for capital expenditure or reward the shareholder in the form of a dividend. But capital expenditure may not be that easy in a year marred by the pandemic.

ONGC, SAIL, NTPC and BHEL are among the large PSU companies.

Sources said the government has also asked a few of them to buy back their shares as it runs abysmally short of the disinvestment target. Under the buyback mode, the government can raise money by selling its equity in the company to the PSU itself.

This fiscal year, the government has set a lofty disinvestment target of Rs 2.1 lakh crore as against last year’s Rs 65,000 crore. This includes Rs 1.2 lakh crore from divestment in public sector companies and Rs 90,000 crore from sale of stake in public sector banks and financial institutions.

On top of that, fiscal deficit or the gap between the government’s expenditure and its revenues is expected to be nearly 7% of the gross domestic product.

The buyback could help only to a certain extent.

Coal India, NTPC and NMDC may have been asked to buy back their shares, the sources said.

In the April-June period, the PSUs spent over Rs 37,000 crore in capex, which was only 32% of the target. Last year, the capex target was Rs 1.11 lakh crore but they had spent over Rs 1.15 lakh crore.

In a meeting with the officials of PSU departments and their ministries, Sitharaman said better performance of CPSEs can help the economy in a big way to recover from the impact of Covid-19.

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(Published 19 October 2020, 21:30 IST)

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