Forget stimulus, clear your dues: Rs 7 lakh crore unpaid dues to industry by central govt depts and PSUs
Financial Express
Dated: September 08, 2020
By: Prasanta Sahu
If the Centre’s dues of Rs 2.5 lakh crore to the Food Corporation of India (FCI) are added, as on March 31, 2020, the unpaid dues by the government to various economic players could climb to around Rs 9.5 lakh crore or 4.2% of the GDP estimated for FY21; in fact, the dues will appear to be much higher when expressed as fraction of GDP given the shrinking GDP.
If the Centre’s dues of Rs 2.5 lakh crore to the Food Corporation of India (FCI) are added, as on March 31, 2020, the unpaid dues by the government to various economic players could climb to around Rs 9.5 lakh crore or 4.2% of the GDP estimated for FY21; in fact, the dues will appear to be much higher when expressed as fraction of GDP given the shrinking GDP.
NHAI owed concessionaires, as on February 2020, around Rs 25,900 crore – Rs 5,400 crore for annuity obligations, Rs 19,300 crore of grant for Hybrid Annuity Model projects and Rs 1,200 crore of grant/viability grant funding towards BOT (Toll) projects. These apart, as on December, 2019, more than 300 highways arbitration cases involving total claims by contractors of Rs 78,653 crore were ongoing.
As on March 31, 2020, state discoms had owed Rs 91,860 crore to power generating companies; the dues increased to Rs 1.17 lakh crore as on July 31. Similarly, discoms haven’t paid Rs 6,145 crore to PowerGrid Corporation, the transmission utility.
The central and state governments owe sugar mills over Rs 9,400 crore; the bulk of this, around Rs 8,300 crore, is owed by the Centre under various heads like a production subsidy, a buffer stock subsidy and even interest subvention. Another Rs 1,100 crore is owed by states that bought electricity produced by sugar mills but have yet to pay for it. This is even as the sugar mills owe farmers about Rs 17,300 crore across the country for cane supplies.
As on March 31 this year, the Centre also owed about Rs 27,000 crore to fuel retailers towards expenditure on kerosene and cooking gas subsidy.
Expenditure secretary TV Somanathan recently said the dues from 26 top central PSUs to MSMEs were less than Rs 1,000 crore as on March 31, 2020. Including defence establishments, railways and other departmental undertakings, the dues from the Centre and departmental undertakings were less than Rs 10,000 crore by the end of last fiscal, he had said.
In May, MSME minister Nitin Gadkari had created a flutter by saying that the Central government, state governments and corporate India together owed more than Rs 5 lakh crore to MSMEs.
Former national president of All India Manufacturers Organisation KE Raghunathan had told FE that the government may be referring to the cases reported by MSME Samadhaan website, an online delayed payment monitoring system. Raghunathan had said most of the MSMEs have not taken this route for fear of repercussions to their businesses.
If the Centre’s dues of Rs 2.5 lakh crore to the Food Corporation of India (FCI) are added, as on March 31, 2020, the unpaid dues by the government to various economic players could climb to around Rs 9.5 lakh crore or 4.2% of the GDP estimated for FY21; in fact, the dues will appear to be much higher when expressed as fraction of GDP given the shrinking GDP.
Of course, the FCI operations are going on largely unaffected since the NSSF loan facility has been made available to it.
The budgetary (fiscal) cost of the stimulus announced so far — 1.4% of the GDP — has been more than offset by the expenditure curbs in other areas. As FE reported earlier, the government is likely to announce another dose of stimulus by October-November, which will focus on infrastructure and construction sectors, and may include an employment scheme for the urban poor on the lines of the Mahatma Gandhi National Rural Employment Guarantee Scheme. However, even this new tranche of stimulus could prove to be economical from a fiscal perspective, even as many economists and analysts warn against such a policy line, given the collapse of private consumption and investments.
The Centre’s Budget spending in April-July was up just 11.3% on year, compared with the targeted growth (Budget estimate) for the full year of 13.2%. For July, the spending growth was a mere 6% on year, against 46% achieved in June, according to the official data released separately on Monday. Worse, the budget capex in July at `23,576 crore was down a sharp 47% on year.
(With inputs from Surya Sarathi Ray and Anupam Chatterjee)
Comments
Post a Comment