New Delhi (IANS) Asserting that all payment delays to the vendors to be ironed out at the earliest, Finance Minister Nirmala Sitharaman on Saturday directed the CPSEs to clear all outstanding payments by October 15 to kick off investment cycle in the economy and sought their estimated capex plans for the next four quarters in the same time.
She also asked the CPSEs to set up a payments portal by October 15 for tender participations, dealers, service providers to monitor dues payments and clear payments.
The Minister has also sought the estimated capex of the CPSEs by October 15 for the next 4 quarters.
"The idea is to front load the capital expenditure. The objective of the meeting was to see the payments which were due to services rendered or goods supplied the PSUs are being held back with the intentions that we have to clear them all by October 15, to get a clear picture of their capex and also the milestones for the four quarters," Sitharaman said after the meeting in a briefing.
"The drive will be done between now and 1st week of October so that all kinds of requirements are made and payments are done before October 15 and by then, they will have a portal through which all dealers and contractors shall start monitoring their payment," she added.
"There will be meeting with the RBI and the Finance Secretary and selected number of CPSE to talk about why bank guarantee are becoming a big hitch or hurdle in government paying up the 75 per cent post arbitration awards. If that is the case, I want RBI help also. The Finance Secretary will discuss with RBI and sort this out", Sitharaman said.
Expenditure Secretary GC Murmu said the overall capex of the over 200 PSUs will be in excess of Rs 4 lakh crore for the current fiscal and Rs 48,077 crore capex has already been done till August by the 34 CPSEs who were present in the meeting today.
"The PSUs have Rs 50,159 crore projects in the pipe line Atill December 2019 and Rs 54,700 crore capital investment by the CPSEs are slated for Q4 of the current fiscal. These 34 CPSEs will have a capex of Rs 1.54 lakh crore by the end of the fiscal," Murmu said.
The minister also asked them to deal with post arbitration counterclaims with regard to payments and also the nature and history of the arbitration for the stuck payments must be given to the Ministry.
Murmu said Rs 49000 crore is stuck in arbitration and road and highways execution PSU NHAI is also involved in some litigations.
He said 3-4 CPSEs have hinted at need for government support and the ministry has asked CPSEs to review position & firm up a figure for requirements.
Sitharaman met 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.
According to a Finance Ministry statement, 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. 32, 921 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.
Atanu Chakraborty, Secretary, Department of Economic Affairs said, "Once you frontload the capex, they have internal accruals, borrowing, they may use internal accruals. Certain companies gear up faster and borrow more and spend more to push more capex.
Rajeev Kumar, DFS secretary said that total exercise was to know that PSUs are aboard in spending. PSUs have also planned the next 2 quarters, once its finalised by October 15, depending on absorption capacity, finances can be got from debt, equity or borrowing.
"We will have full list by October 15, finances will not be an issue," Kumar said.
The minister said nearly Rs 60,000 crore of purchases have been made by CPSE outside of GeM (Government eMarketplace).
"We have asked for details as to why purchases were made out of the GEM platform but I am not alleging wrongdoing, there must be a rationale, that's why I have sought report," the minister said.