‘Ministries told to provide plan for four quarters, release all dues to services and goods suppliers‘
Finance Minister Nirmala Sitharaman chairing a meeting with secretaries and financial advisers of key Ministries. PTI
The government’s capital expenditure is on track and will meet the budgeted target by the end of the year, Finance Minister Nirmala Sitharaman said on Friday.
Ms. Sitharaman added that she had given instructions to all the major Ministries to release all pending dues and to also provide a capital expenditure plan for the next four quarters.
The central government’s total expenditure for fiscal 2019-20 through the Budget is ₹27.86 lakh crore, of which the capital expenditure is budgeted at ₹3.38 lakh crore (12.2%).
Apart from this, the total grants-in-aid given to the Ministries and Departments amounts to ₹2.07 lakh crore, taking the total capital expenditure amount for 2019-20 to ₹5.45 lakh crore.
The government on Friday said that as of August, 40.28% of the expenditure under the capital head, and 39.7% of the expenditure under the grants-in-aid head, had been assigned.
“The government is on track to meet its budgeted capital expenditure by the end of the year, we expect 100% of the budgeted amount to be met,” Ms. Sitharaman said at a press conference following a meeting with 21 major Ministries to review their capital expenditure progress and future plans. “We have also asked the Ministries to provide a capital expenditure plan for the next four quarters,” she added.
“Some Ministries orally spelt out their plans, but within the next week they will provide a plan to the Expenditure Secretary.”
The Finance Minister also said she had made it clear to the Ministries that they must release all the pending dues to their services and goods suppliers at the earliest, and added that the impression she got from the Ministries was that the “little that was left pending would be released in the next few days”.
‘Get expenditure going’
“At this stage, we are only looking at getting expenditure going,” Ms. Sitharaman said when asked whether the government would meet its fiscal deficit target for the year. “Nearer the time, we will have to look at reconciling this with our budgetary commitments.”
Expenditure Secretary Girish Chandra Murmu said that of the about ₹60,000 crore of payments that were pending, about ₹40,000 crore had already been released.
Ms. Sitharaman added that about 90% of outstanding GST refunds that were due had also been released as of August 23.
‘Formula after balancing all requests’
While the Finance Ministry has been asking the Fifteenth Finance Commission for a lower limit for tax devolution to the States, the Chairman’s office told The Hindu that the Centre’s plea was just one among 30 different requests, including those from the States, and that the Commission would decide its devolution formula independently after balancing all the requests.
The Fourteenth Finance Commission had recommended that 42% of the Centre’s tax revenue be transferred to the States, a significant increase from the recommendations of the previous Finance Commission.
The Fifteenth Finance Commission (FFC) has been tasked with, among other things, reviewing this percentage and changing it if need be for the five years starting April 1, 2020.
Officials in the Finance Ministry told The Hindu that the Ministry had in the past asked the FFC to review downwards the devolution percentage.
However, Finance Minister Nirmala Sitharaman, when asked about this on Friday, said that she had not written to the FFC about this.
It is learnt that the earlier pieces of communication had been sent by the erstwhile Finance Secretary Subhash Chandra Garg, who was recently transferred out of the Finance Ministry to take over as Power Secretary. It has been reported that the FFC has since asked the Finance Ministry to send a fresh memorandum containing its requests. This has, however, been refuted by the FFC.
“It is routine for the Commission to ask for updated figures, so it would be wrong to say that we have asked the Centre for a fresh memorandum,” the Office of FFC Chairman N.K. Singh told The Hindu.
“The Centre is just one of the parties making their requests to the Commission out of 30, and so the Commission will find a balance between all of these. The decision of the Commission will be made independently.”
Each of the erstwhile 29 States (now 28 with the reorganisation of Jammu & Kashmir) have also made their presentations to the FFC and have made their requests.
Several of them have asked the FFC to, in fact, increase the devolution limit since the Centre has been shifting its revenues from taxes to cesses, which do not have to be shared with the States.
Inspection officials restrained actions without prior notice: former MD of bank
Joy Thomas, the former managing director of troubled lender Punjab and Maharashtra Cooperative Bank said the Reserve Bank of India acted in haste in imposing curbs by restricting deposit withdrawals.
“It was a harsh decision on us. Without giving us any time, RBI acted in this manner,” Mr. Thomas said, addressing a press conference.
Earlier this week, RBI imposed restrictions on the city-based lender which created panic among depositors as withdrawals were capped at ₹1,000, which later increased to ₹10,000. The board of the bank was superseded and a former chief general manager of RBI was appointed as administrator.
He said the PMC Bank board members met RBI’s executive director Rabi Mishra on September 19, and informed that the loans to real estate developer HDIL were not disclosed as non-performing for 6-7 years and asked for time from the banking regulator to regularise the account.
“On 20th, inspection officers collected the data from the bank and without any prior notice to the bank, on 23rd restrained the actions of the bank,” he said.
“We knew that if the exposure [were to] be reported, it will create a run on the bank and all the depositors and even the bank staff would have to suffer; so we decided to get some helping guidelines, but RBI acted in the manner which we were afraid of. Bank had enough liquidity, which should have been noted by the RBI.”
On Thursday, while increasing the deposit withdrawal limits to ₹10,000 from ₹1,000, RBI said the curbs were imposed due to ‘major financial irregularities’.
Talking about HDIL, the former MD admitted that the bank extended a loan of ₹2,500 crore in a period of six years. “The company was banking with us since 1989 and they were repaying us the money properly.
“The problem started [over the] last 2-3 years since they weren’t able to pay.”
‘2.5 times more security’
Mr. Thomas assured the conference that the ‘money of the depositors was safe’ as the bank has ‘2.5 times more worth of security than the exposure to HDIL’.
“We have security in the form of buildings and land which are 2.5 times more than the exposure handed.”
Mr. Thomas said, “Even after HDIL went bankrupt, we handed them a loan of ₹93 crore, although the sanction of loan wasn’t done by the board of directors.”
“The loans that were handed to HDIL were left unnoticed in the audit by the RBI since last six to seven years.” He emphasised that no fraud had taken place. Rather, it was a technical fault. “I’ve been told that the withdrawal limit can be increased to ₹1 lakh,” he said.
West Asian country’s sales to India rose 12% in April-August
India’s crude oil imports from the U.S. have jumped by over 72% in the first five months of the current fiscal as the country looks to diversify oil purchases beyond its traditional suppliers in West Asia, official data showed.
According to data sourced from the Directorate General of Commercial Intelligence and Statistics, the U.S. supplied about 4.5 million tonnes of crude oil in April to August 2019, as compared to 2.6 million tonnes oil sourced from that country in the same period a year ago.
Iraq continues to be India’s top crude oil supplier, meeting close to one-fourth of the country’s oil needs. Iraq sold 21.24 million tonnes of crude oil to India during April to August, almost 12% more than 18.99 million tonnes it had supplied in the same period of the previous fiscal.
India provisionally imported 91.24 million tonnes of crude oil in April-August 2019, down from 93.91 million tonnes a year ago.
Saudi Arabia has traditionally been India’s top oil source, but it was for the first time dethroned by Iraq in the 2017-18 fiscal year. Saudi Arabia, which has since then been relegated to the second spot, exported 17.74 million tonnes of crude oil, up from 15.66 million tonnes in the previous year.
Nigeria ranks third
India stopped importing crude oil from Iran following the reimposition of economic sanctions in May by the U.S., pushing down imports from the Persian Gulf nation to just 2 million tonnes from 13.3 million tonnes in the previous year, data showed.
Nigeria grabbed the third spot vacated by Iran. The African nation supplied 7.17 million tonnes of crude oil in April-August, up from 5.81 million tonnes a year ago.
Offers rh-Insulin at less than 10 U.S. cents/day in LMI nations
Kiran Mazumdar-Shaw, philanthropist and founder of Biocon, said she would enable universal access to high quality insulin by making available recombinant human Insulin (rh-Insulin) at less than 10 U.S. cents /day in low and middle-income countries (LMICs).
LMICs, which form most of the world, contribute to 80% of the global disease burden. “My conviction is that a life-enabling product like insulin cannot be priced out of the reach of those that need it on an everyday basis, whether in the United States or in Africa,'' said Ms. Mazumdar-Shaw.
Ms. Mazumdar-Shaw made the above personal commitment at a United Nations General Assembly (UNGA) meeting on innovation and universal health access, convened by UNAIDS Health Innovation Exchange, in the presence of the President of Ethiopia, the First Lady of Namibia, Health Ministers from Botswana and Malawi, and representatives from the private sector and development agencies.
Biocon’s Recombinant Human insulin offer of less than 10 U.S. cents/day in LMICs is for vials sourced by the government directly from Biocon, assuming an insulin dosage of 40 IU per day. Currently, the blended median patient prices in LMICs are $9 per 10ml vial, translating to 36 U.S. cents/day. The current U.S. list price in retail is over $5/day.
Biocon Biologics’ recombinant human insulin has been developed using scientific expertise, R&D and manufacturing facilities that have allowed it to bring multiple biosimilar medicines to the U.S. and Europe.
So far, the company had provided over 2 billion doses of human insulin worldwide.