Finance Minister Nirmala Sitharaman had earlier said steps would be taken to clear government's dues to suppliers and service providers. After holding a review meeting with various infrastructure ministries on Friday, Sitharaman said the government has cleared Rs 40,000 crore in pending payments a month after her announcement.
After her announcement on August 23, Expenditure Secretary Girish Chandra Murmu was tasked to hold weekly meetings with roads and transport, shipping, housing and urban development, shipping, civil aviation and railways ministry officials. "After we have started (inter-ministerial review meetings), outstanding payment of about Rs 40,000 crore have already gone into the market," said Murmu, after the finance minister's meeting.
The expenditure secretary had held three rounds of review meetings with all these ministries. He said payments and dues to MSMEs and other service providers are already being cleared.
"Tomorrow, we will have separate meetings with PSUs and other agencies under various ministries. The idea is to understand that there are no outstanding dues for services or goods supplied to different ministries," said Sitharaman. "We are essentially making sure that monies that are due, are given."
"Already most of these non-litigated dues have been cleared, and the little that is remaining will be cleared very soon," said the finance minister.
The expenditure department of the finance ministry assesses that there are about Rs 60,000 crore of non-litigated dues that were to be paid, of which Rs 40,000 crore has already been cleared, the finance minister said. "Essentially, we are making sure that monies that are due should be given," she added.
The finance minister also sought to understand the capital expenditure of each of the infrastructure ministries and asked for quarter-wise plans from the ministries for the next four quarters. "This is being done so that there is a clear commitment by ministries as to how much they will commit and how much is going to get grounded in each of the next four quarters," Sitharaman said.
According to the finance ministry assessment, only about 40 per cent of the more than Rs 5,45,000 crore capital expenditure plan of the government has so far materialised.
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During the meeting, the finance minister instructed secretaries to come back next week with a clear picture of their capital expenditures for the coming year. "The larger intention has been that money should go to where people have been waiting for a long time. Money should go to the ground and germinate these projects now," said Sitharaman.
The minister said for those government dues that are under litigation, courts will take its process for releasing those payments. The industry estimates that there are more than Rs 3,50,000 crore pending dues held back under litigation by the government.
Battling a six-year low GDP growth, the government hopes that releasing pending dues to government contractors will bring some buoyancy in a market where latent consumer demand is visible, but starved of cash to spend.
"Like I said yesterday, banks are seeing latent consumer demand. It is not that consumer demand is not there," Sitharaman said after the meeting.
