New Delhi, Sep 27: Taking a slew of measures in an effort to revive the Indian economy, Finance Minister Nirmala Sitharaman on Friday asked all the government departments to clear non-litigated dues of service providers.
Talking to reporters here after meeting with Secretaries and Financial Advisors of key Ministries, the minister said, “Tomorrow, we'll have a separate meeting with different agencies of public sector undertakings and other agencies which come under different ministries… At this stage, my intention is to make sure that government does not sit on payments which are due, that government does not sit on CAPEX (capital expenditure) which it had planned.”
She said that the capital expenditure of the government is on track. The minister also asked for CAPEX plan for next four quarters. Total CAPEX spend is at 42 percent till August-end, Expenditure secretary GC Murmu said. The government expects to clear Rs 20,000 cr dues by October first week. Out of the Rs 60,000, Rs 40,000 has already been cleared.
CAPEX refers to Capital expenditure. It is incurred when a business acquires assets that could be beneficial beyond the current tax year.
The meeting came days after the minister announced a reduction of corporate tax rate from 35 per cent to 25 per cent. For companies that do not avail of any other incentive or commission, the effective tax rate would be just 22 per cent.
To address the growth challenge, the government has been holding wide ranging stakeholder consultations and has taken several steps to provide boost to the economy. Today’s meeting was in continuation of a series of meetings held by Secretary (Expenditure) to review CAPEX as well as to ensure that due payments to contractors, GeM dues and MSME dues are cleared, the finance ministry said.
Another meeting is scheduled tomorrow with the Maharatnas and Navratnas. Expenditure, both revenue and capital, made by the Union government provides a major boost to aggregate demand.
Total expenditure of the Central government for FY 2019-20 through the budget is Rs 27.86 lakh crore. Of this Capital expenditure is budgeted at Rs 3.38 lakh crore (12.2%) in BE 2019-20 as against revenue expenditure of Rs 24.27 lakh crore (87.8%).
While the capital expenditure till August 2019 is around 40 per cent at Rs. 2.18 lakh crore from GBS, the Finance Minister also took stock of the expenditure plans for the next two quarters and directed that Secretaries and the Financial Advisors must closely monitor the execution of capital works and ensure that payments are released on time as to achieve the targeted capital expenditure of Rs. 5.45 lakh crore.
She directed that the capital expenditure must be monitored on a monthly basis to ensure that there are no slippages. Expenditure Secretary G C Murmu informed that CPSEs had released payment of Rs 20,157 crore in the last three months. He stated that Department of Expenditure would constantly monitor the progress of large infrastructure projects for the Ministries as well as the CPSEs and further follow-up meetings would be held. (UNI)