Govt. wants the CPSEs to double their contribution to the GDP
Union Minister for Finance & Corporate Affairs Nirmala Sitharaman met here today the top brass of the Maharatna and Navratna Central Public Sector Enterprises (CPSEs) to review their capital expenditure till date and plans for the next two quarters of this financial year. This meeting was held as part of the series of meetings that the Finance Minister has been having with various stakeholders and the measures that have been taken to accelerate the economic growth rate. The Meeting was attended by Finance Secretary Shri Rajeev Kumar , Secretary DEA Shri Atanu Chakraborty & Secretary Expenditure Shri GC Murmu & Heads /Representatives of 32 CPSEs .
The combined capital expenditure by the Central Public Sector Enterprises (CPSEs) and Departmental Undertakings (DUs) such as the NHAI and the Indian Railways contribute in substantial measure to fixed assets creation in the economy.
Public procurement as a percentage of GDP in the country is estimated between 20% to 22%. For a size of Indian economy at USD 2.7 trillion, this amounts to public procurement to the tune of USD 500 billion annually. CPSEs are a major contributor to public procurement of works, goods and services.
Government has introduced performance-based evaluation and has also empowered the Boards of Maharatna and Navratna companies for taking operational decisions. Government wants the CPSEs to double their contribution to the gross domestic product (GDP) and be the “third major source” of revenue for the Centre after direct and indirect taxes. CPSEs must make efforts to reduce the country’s imports bill and expanding India’s global strategic reach by 2022.
A major transformation has taken place in the last few years in the way procurement is made in the Government by setting up Government e-Marketplace (GeM) and the Central Public Procurement Portal. This allows procurement to take place in a completely paperless, cashless and system driven e-market with minimal human interface. These platforms help in not only making public procurement efficient and accountable but also enhances resource efficiency.
The participating CPSEs presented their Capital Expenditure (CAPEX) till August 2019 with the Finance Minister and explained their plans for the next two quarters. ONGC has a capex plan of Rs. 32921 crore for FY 2019-20. Its capex till August 2019 was 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 8,173 crore ( 32%) has been spent. NTPC has made CAPEX of Rs. 8490 crore (42%) out of a plan of Rs. 20,000 crore. 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 stressed that CAPEX needs to be given a vigorous push in the next two quarters. Therefore, CAPEX plan has to be firmed up and followed up with ground level execution. Ministry of Finance would monitor the capital expenditure regularly. CPSEs must ensure that regular payments are cleared expeditiously as it spurs investment cycle and establish e-Billing portal for enabling stakeholders to track the status of payments. Special efforts must be made to clear dues of MSMEs and resolve cases on the SAMADHAN portal of Department of MSME.