Sectors seek faster payment of amounts govt owes them

A CONSOLIDATED AMOUNT OF WHAT THE GOVERNMENT OWES COMPANIES COULD RUN INTO A FEW LAKH CRORE

nNEWDELHI: India’s businesses are expecting the government to roll out a fiscal relief and stimulus package of the same magnitude as the one unveiled by the US -equivalent to around 10% of GDP -- but are also hoping the Centre and states, various administrative departments, state-owned companies and utilities will accelerate payments owed to them as they battle a crisis of never-seen-before proportions.

A consolidated amount of what the government owes companies, large and small, isn’t readily available, but HT learns that it could run into a few lakh crore with the big-ticket ones being the money owed by the Centre to fertiliser companies towards subsidies and that owed by state power distribution companies to power producers.

For instance, by last month, the amount owed by the Centre to fertiliser companies had touched ₹60,000 crore, according to KS Raju, the chairman of industry body Fertiliser Association of India.

Power companies say they have it worse. The amount owed by state-run power distribution companies to power generating companies (gencos) stood as high as ₹88,426 crore until February. “Government may have to facilitate interest-free working capital loans for gencos. Else, this contagion will spread to fuel suppliers and sustainability of all sector entities will come under question,“said Debashish Mishra, Deloitte India.

Among the worst affected are micro, small and medium enterprises, or MSMES.