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Rs 1L cr spending plan by PSUs to boost economy: FinMin

Last Updated 28 September 2019, 15:34 IST

Around 240 public sector companies will spend close to Rs 1 lakh crore in 2019-20 to revive India's floundering economy, Finance Minister Nirmala Sitharaman committed on Saturday amid mounting pressure on the government to cut the personal income tax rates and give money in the hands of individuals to spend.

The committed expenditure will include capital spends by state-owned companies and the payments due to their service providers.

PSU firms have spent over Rs 48,000 core in asset creation till August and have submitted a plan to the government for another about Rs 50,000 in the next about four to six months.

The decision came after the finance minister reviewed the capital expenditure plan of 32 PSU units in a meeting with them on Saturday.

While PSU behemoth ONGC has a capital expenditure plan of Rs 3,2921 crore for the current fiscal, its capex till August had been Rs 8,777 crore which was 26.66% of the total planned capex.

Indian Oil Corporation has a capex plan of Rs 25,083 crore of which Rs 8,173 crore or 32% has been spent.

Similarly, NTPC has spent about 42% of a planned Rs 20,000 crore expenditure. The CPSEs which participated in the meeting have plans of making capital expenditure of Rs. 50,000 crore in the next quarter.

The finance minister told the PSU companies that the capital expenditure needed to be given a vigorous push in the next two quarters. State-owned firms must ensure regular payments to their service providers, she said, adding that was the only way to spur the stalled investment cycle.

Economists and brokerages across the spectrum have suggested that the government needed a less “flashy” remedy at the time when demand was at multi-year low.

According to an IDFC First Banknote, a better way to push the economy at this juncture was to cut the personal income tax rate.

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(Published 28 September 2019, 15:27 IST)

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