Finance minister Nirmala Sitharaman asked ministries to provide capital expenditure plans for the next four quarters and accelerate payment of dues to micro, small and medium enterprises (MSMEs), contractors and vendors as she detailed the government’s plans to fast track spending to boost growth. She also said a large chunk of pending dues to MSMEs, contractors and other vendors have been cleared and out of £6 billion dues, £4 billion has been released and remaining £2 billion would be released by the first week of October. The MSME sector had complained about delayed payments and the government has swung into action to get the issue resolved and ensure funds are not a constraint for the sector.
FM said the government’s capital expenditure was on track and budget estimates would be achieved, highlighting the efforts to get engines of the economy roaring again after GDP growth slowed to an over six-year low of 5% in the April-June quarter of the current financial year. The government has unveiled a series of measures, including a sharp cut in corporate tax rates and is hopeful that growth will revive in the second half of the financial year.
The FM said private banks and NBFCS have told her that consumption is good and there is growing credit offtake. She said this should ensure good consumption buoyancy in the festival season. Expenditure, both revenue and capital, made by the Centre provides a major boost to aggregate demand. During review, the finance minister told the ministries that regular payments must be cleared expeditiously as it spurs investment cycle. She emphasised that all efforts must be made to ensure that outstanding payments are cleared before the festival season.
Expenditure secretary G C Murmu said central public sector enterprises (CPSEs) had released payment of £2.02 billion in the last three months. He said that department of expenditure would constantly monitor the progress of large infrastructure projects for the ministries as well as the CPSEs and followup meetings would be held.