Sitharaman's big push for increasing capital expenditure

The finance minister told officials that infrastructure projects were a priority for the government and necessary funds will be made available for capital expenditure as she asked them to monitor the implementation of projects in addition to monitoring the release of funds, writes ETV Bharat's Krishnanand Tripathi.

New Delhi: Finance Minister Nirmala Sitharaman on Monday urged the top officials of the civil aviation and telecom ministries to increase their capital expenditure for the year and also plan for the next year as she asked them to monitor the project implementation in addition to releasing the fund, said the ministry of finance.

In the review meeting with the two ministries, the finance minister pushed for an accelerated phase of infrastructure development that is considered crucial for achieving faster economic growth that declined by more than 7% in the last financial year due to the outbreak of the Covid-19 global pandemic.

Sitharaman, who last week returned from a week-long US trip, reviewed the capital expenditure during the April-September period and front-loading of capital expenditure by the two ministries and the central PSUs under them.

She also reviewed the capital expenditure plan for October-March 2022 period, money spent on the projects related to Prime Minister Narendra Modi’s ambitious National Infrastructure Pipeline (NIP).

She also assessed the funds to be raised through asset monetization as the government this month cleared privatization of ailing national carrier Air India to the Tata Group.

In the high-level meeting, which was attended by the economic affairs secretary Ajay Seth; civil aviation secretary Rajiv Bansal, telecom secretary K Rajaraman and other senior officials of the finance, telecom and civil aviation ministries, Sitharaman also discussed the status and convergence of public-private partnership (PPP) projects and capital expenditure projects with the National Master Plan (PM Gati Shakti) launched by Prime Minister Narendra Modi this month.

The PM Gati Shakti aims to streamline infrastructure development by utilizing the latest information technology tools, maps and other resources.

“Ministries must pool in all efforts to ensure higher capital spending in coming months to achieve higher growth in the economy,” the finance minister told officials of telecom and civil aviation ministries.

More than Rs 5.5 lakh crore allocated for capex

In this year’s budget, Prime Minister Narendra Modi’s government allocated over Rs 5.54 lakh crore for capital expenditure, an all-time high, to shore up a slowing economy hit hard by the outbreak of Covid-19 last year.

The finance minister told officials that infrastructure projects were a priority for the government and necessary funds will be made available for capital expenditure as she asked them to monitor the implementation of projects in addition to monitoring the release of funds.

According to officials, in the review meeting, the finance minister told the officials to track the infrastructure projects of state government and private sector related to their ministries so that the pace of infrastructure development across the country, including the private sector, could be captured.

Officials of the department of economic affairs (DEA) have been asked to coordinate with the civil aviation ministry so that more projects are initiated and capital expenditure of the civil aviation ministry for the next financial year (FY 2022-23) could be increased substantially.

Asset monetization

Encouraged by the successful privatization of Air India, which was incurring losses of Rs 7,000-8,000 crore per year, the finance minister asked the department of telecommunications to fast-track the asset monetization in consultation with the department of investment and public asset management (DIPAM).

Sitharaman also asked the department of telecommunication to increase its capital expenditure and expand the digital services in the entire northeast region on priority.

Officials have been directed to draw up their capital expenditure plan for the next financial year.

Monday’s meeting is the first meeting chaired by the finance minister to push capital expenditure of different ministries and departments. The first round of the meetings was held in June this year.