Finance Minister Nirmala Sitharaman on Saturday asked representatives of central public sector enterprises (CPSEs) and other government agencies to launch a new drive for clearing pending dues to contractors and suppliers by mid-October.
She asked for the review their capital expenditure (capex) till date and plans for the next two quarters of this financial year. "Payments which are pending for services rendered, goods supplied or any other work done for PSUs and government agencies will be cleared by October 15," she told reporters after the meeting.
Besides, said Sitharaman, the review of post-arbitration cases and counter-claims must be expedited.
The meeting was held as a part of interactions with various stakeholders to accelerate the economic growth rate amid a slowdown. Finance Secretary Rajeev Kumar, Secretary at Department of Economic Affairs Atanu Chakraborty and Secretary, Expenditure, GC Murmu were present in the meeting along with heads and representatives of 32 CPSEs.
The combined capex by CPSEs and departmental undertakings like the National Highways Authority of India (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 per cent. For a size of Indian economy at 2.7 trillion dollars, this amounts to public procurement to the tune of 500 billion dollars annually. CPSEs are a major contributor to public procurement of works, goods, and services.
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The government has introduced performance-based evaluation and empowered the boards of 'Maharatna' and 'Navratna' companies for taking operational decisions. The aim is 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.
The government believes 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 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 capex till August with the Finance Minister and explained their plans for the next two quarters. ONGC has a capex plan of Rs 32,921 crore for 2019-20. Its capex till August was Rs 8,777 crore which was 26.66 per cent of the total planned capex.
Indian Oil Corporation (IOC) has a capex plan of Rs 25,083 crore of which Rs 8,173 crore (32 per cent) has been spent. NTPC has made capex of Rs 8,490 crore (42 per cent) 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. Thus capex plan has to be firmed up and followed up with ground-level execution. The Ministry of Finance will monitor this regularly.
"CPSEs must ensure that regular payments are cleared expeditiously as it spurs investment cycle and establishes e-billing portal for enabling stakeholders to track the status of payments," said Sitharaman. "Special efforts must be made to clear dues of MSMEs and resolve cases on the Samadhan portal of the Department of MSMEs.
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