Capex: Current level of capex sustainable, says financial secretary

NEW DELHI: Indicating a continued push for public spending, finance secretary T V Somanathan on Thursday said current level of capital expenditure was “highly sustainable” and asserted that the Centre was on course to meet the spending and fiscal deficit targets for current financial year.
While Somanathan refused to give any guidance on whether the government intends to increase the level of capex, he said he did not expect government agencies to be unable to use the fund allocated for them.
A high growth in capex has been the centerpiece of the Modi government’s second term in office as it banked on investment in roads, railways and other infrastructure projects to spur demand for steel and cement, which in turn is expected to result in fresh investment in expanding capacity at these plants.
The finance secretary also said that the Centre has decided to keep the terms of reference of the 16th Finance Commission simple, giving the soon-to-be-appointed panel “leeway and freedom in consulting” states and other stakeholders in formulating its recommendations. He added that this was based on feedback from several states.
Unlike in recent years, this time the Centre has also decided against giving any Census period as the basis for looking at the population, leaving it the Constitutionally mandated body to decide on the basis for its recommendations.
Somanathan further said the Centre’s Vivad Se Vishwas scheme for MSMEs had helped settle nearly 44,000 claims, enabling these entities to again participate in government contracts. He said that 4,000-odd cases were yet to be decided.

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