CPSE capex rises to 60% of FY target

HAL is the only CPSE that has managed to exceed its annual capex target of ~1,800 crore

The capital expenditure (capex) by large central public sector enterprises (CPSES) with a target of over ~100 crore touched 60 per cent of the overall ~6.62-trillion goal during the first eight months of the current financial year (April-november), according to official sources.

During the same period a year ago, CPSES were able to exhaust only 53 per cent of the full-year target. In FY22, CPSES spent ~5.5trillion capex, or 96 per cent of their annual target of ~5.75 trillion.

Among CPSES, Hindustan Aeronautics is the only one that has managed to exceed its annual capex target of ~1,800 crore. BSNL has been able to achieve 53 per cent of its annual target of ~44,720 crore. The official said the CPSE is giving enhanced investment towards tower installation activities and will see a hike in the coming months. NTPC has managed to achieve 68 per cent of its target of ~22,454 crore.

A government official said CPSES were likely to achieve their target as they tend to rush their spending in the March quarter. “CPSES that fail to meet their targets, may see a cut in their capital outlay in the upcoming Budget.

The capex targets are taken seriously by these CPSES that help the government undertake their performance evaluation and decide on performance-related pay,” the official said.

The capex report of these CPSES after the end of every month is sent for review to the Prime Minister’s Office (PMO).

The largest crude oil and natural gas producer company ONGC has been able to achieve 56 per cent against its budgeted annual capex target of ~29,950 crore. Indian Oil Corporation (IOCL) achieved 83 per cent of its annual target of ~28,549 crore on the back of the resumption of work on its pipeline projects after the pandemic and enhancing its refining capacity.

On the other hand, Hindustan Petroleum Company (HPCL) has been able to achieve 76 per cent of its annual target of ~14,500 crore.

GAIL (India) Ltd has spent 82 per cent of its annual capex target of ~7,500 crore on the back of its investments in pipelines for the natural gas transmission and distribution business.

In the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced an increase of 35.4 per cent in the capital expenditure outlay to ~7.5 trillion, including a ~1-trillion interest-free loan to states.

During April-november period of FY23, the Centre has been able to spend only 54.6 per cent of its full-year capex target, according to latest data available from the Controller General of Accounts.

Last month, Chief Economic Advisor V Anantha Nageswaran had said the government should focus on completing ongoing capex projects in the public sector rather than starting new ones.