NEW DELHI: The Narendra Modi government on Saturday directed the state-run Public Sector Undertakings (CPSUs) to clear overdue payments to vendors and contractors by October 15.
Addressing a press conference after meeting the heads of major CPSUs (Central Public Sector Undertakings), Union Minister of Finance and Corporate Affairs Nirmala Sitharaman said that the CPSUs have been asked to clear all overdues by October 15.
The FM further said that the state-owned companies have been asked to set up a portal by October 15 to enable service providers, vendors and contractors to track bills and payments so that the liquidity crunch is mitigated.
Besides, the PSUs have been asked to detail the lifespan of arbitrations that lock payments after disputes with vendors and contractors, the FM said.
The FM made the announcement following a meeting to review total Capital Expenditure (CAPEX) by the CPSUs in 2019-20 till now and plan for future CAPEX in the current Financial Year.
The state-owned firms have been asked to submit their spending plans for the next four quarters, the FM said.
Among other steps, FM Sitharaman said that the PSUs will spend more than Rs 1 lakh crore in this financial year. The Finance Minister added that the PSUs would review post-arbitration claims without compromising the companies’ interests.
Addressing the press conference, Finance Secretary Rajeev Kumar said the government is ensuring the momentum in Capex continues by taking care of delays in payments.
For this fiscal, the total Capex expected by the 34 CPSEs is about Rs 1.04 lakh crore. They will spend another Rs 50,000 crore till December 2019, and an additional Rs 54,000 crore for Q4FY20, Kumar said.
"The idea is to front-load the capital expenditure," Sitharaman added.
Expenditure Secretary GC Murmu said that CPSEs will submit monthly reports on their Capex via their nodal ministries, adding "We will review the expenditure status every 15 days."
He further said that three to four CPSEs had hinted at a need for government support.