Central government departments, Central public sector undertakings (PSUs), and some state PSUs together owed around Rs 7 lakh crore in dues to the industry at the end of FY20. The dues might also have only risen in view that, according to official sources. Had these monies been released to the companies concerned, it can have amounted to a massive stimulus to the sinking economy, without a corresponding budgetary cost or upward push in public-sector borrowings. This is because a large part of these unpaid dues to the industry are on behalf of the state-run undertakings/PSUs, many of which are cash-rich.
NHAI owed concessionaires, as in 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) initiatives. These apart, as in 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 multiplied 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 at the same time as the sugar mills owe farmers about Rs 17,300 crore across the country for cane supplies.
The budgetary (fiscal) cost of the stimulus announced so far — 1.4% of the GDP — has been greater than offset by the expenditure curbs in other areas. As FE reported earlier, the government is probably to announce another dose of stimulus by October-November, which will focus on infrastructure and construction sectors, and may consist of an employment scheme for the urban poor on the lines of the Mahatma Gandhi National Rural Employment Guarantee Scheme. But, even this new tranche of stimulus could show to be economical from a fiscal angle, even as many economists and analysts warn against this kind of policy line, given the collapse of personal consumption and investments.
The Centre’s budget spending in April-July become up just 11.3% on the year, compared with the targeted growth (budget estimate) for the overall year of 13.2%. For July, the spending boom was a mere 6 percent on the year, in opposition to 46% accomplished in June, according to the official data launched separately on Monday. Worse, the budget capex in July at `23,576 crores was down a sharp 47% on the year.