With a view to pump up expenditure and improve the investment climate in the country hit by COVID-19 pandemic, the government has asked public sector undertakings (PSUs) to become vehicles of growth and complete 50 per cent of their capital expenditure for FY21E before the end of Q2FY21.
This was announced in the review meeting held by Finance Minister Nirmala Sitharaman with Secretaries of Ministries of Petroleum and Natural Gas, Power, Coal, Mines and Department of Atomic Energy along with Chief Managing Directors of 23 Central Public Sector Enterprises (CPSEs) belonging to these Ministries.
Finance Minister has asked Secretaries to closely monitor the performance of the CPSEs in order to ensure capital expenditure to the tune of 50 per cent of capital outlay by Q2FY21.
Nirmala Sitharaman is of the view that the CPSEs play a very important role in giving a push to the growth of the Indian economy and also, help it recover from the impact of COVID-19. For this, she said that it is important that the PSUs achieve the required targets and ensure that the capital outlay for FY21 is spent properly and within the stipulated time frame. One of the major concerns this year is that the sluggish economic activities on account of COVID-19 and sagging demand conditions may also push the PSUs to step back on their investments.
Ministries/CPSEs discussed constraints being faced by them due to COVID-19 such as problems of manpower availability, delay in imports and delay in payments by discoms on the dues of the CPSEs like Nuclear Power Corporation of India Limited (NPCIL) and NLC.
Finance Minister stated that extraordinary situations require extraordinary efforts and with collective efforts, they will not only perform better but also help the Indian economy to achieve better results. Besides, in FY20, against the Capex target of Rs 1,64,822 crore for 23 CPSEs, the achievement was Rs 1,66,029 crore. In Q1FY20, the achievement was Rs 26,320 crore (16 per cent) but the achievement of Q1FY21 has already slowed down to Rs 20,202 crore (12 per cent). A Capex target for 2020-21 is Rs 1,65,510 crore.
S&P BSE CPSE index in today's trading session was trading at negative bias. The index which opened at 1,030.3, declined to an intraday low of 1,019.4.