You are using an older browser version. Please use a supported version for the best MSN experience.

Arun Jaitley asks state-owned firms to step up spending

LiveMint logoLiveMint 28-09-2017 PTI

New Delhi: Finance minister Arun Jaitley on Thursday reviewed the capital expenditure (capex) plan of state-owned enterprises and asked them to step up spending with an aim to shore up the economy as growth hit a three-year low of 5.7%.

The one-hour meeting, which saw participation from various companies, offered the status report on capex spending. The central public sector enterprises (CPSE) have been asked to stick to the capex target for the current fiscal, official sources said. Also present at the meeting were secretaries of various ministries and top executives of Oil and Natural Gas Corp. Ltd, Hindustan Petroleum Corp. Ltd, Bharat Petroleum Corp. Ltd, NTPC Ltd, Steel Authority of India Ltd, Coal India Ltd and Hindustan Aeronautics Ltd, among others.

The meeting was about capex, and as the country is on the growth path, the companies were advised to increase capex, NLC India Ltd chairman and managing director S. K. Acharya said after the meeting. “Will not be able to tell the exact amount as there were many CPSEs, but overall the commitment is, let us do it better for making (higher) growth possible... increase capex more and more for higher growth of the country,” he said. Asked if the special dividend was sought by the companies, Acharya said dividend will be in line with guidelines.

Bharat Electronics Ltd chairman and managing director M. V. Gowtama said, “Already year on year capex has been increased by CPSEs. The government is ensuring we are on track... We have already given ambitious projects, they (government) are reviewing it.”

To a question on whether CPSEs have been asked to increase their dividend this year, Gowtama said the meeting was to review capex and nothing on dividend was discussed.

Since private investment is low, public spending along with investment from CPSEs is expected to drive economic activities and perk up growth. As per the budget estimates, enterprise and other investments have been pegged at Rs67,529 crore for the current fiscal as against Rs77,050 crore in the previous one.

Since early 2016, growth has slackened for six consecutive quarters, with India losing the fastest growing economy tag to China for the second straight quarter. For the first quarter ended June, economic growth hit a three-year low of 5.7%.

Besides the falling gross domestic product (GDP) growth rate, exports are facing strong headwinds and the industrial growth is the lowest in five years. Current account deficit—the difference between inflow and outflow of foreign exchange—rose to 2.4% of GDP in April-June.

More From LiveMint

image beaconimage beaconimage beacon