Capex proposals from states may come early in FY24: FM Sitharaman

States are expected to come up with plans to avail of the budgeted Rs 1.3 -trillion capital expenditure (capex) loans as early as April, Finance Minister (FM) Nirmala Sitharaman said on Thursday at a post-Budget interactive session by the Federation of Indian Chambers of Commerce & Industry (Ficci) on the Union Budget 2023-24 (FY24).
 

“The states showed a good appetite for capex utilisation last year. That has been one of the reasons for increasing allocation by Rs 30,000 crore to Rs 1.3 trillion. In my interaction with state officials, I have strong reasons to believe that the proposals will be in by April,” said Sitharaman.  
 

Answering a question on the underutilisation of capex in 2022-23 (FY23), the FM said notwithstanding delays in the release of funds, states showed “good appetite” for these interest-free loans.
 

In FY23, the plan to release Rs 1 trillion capex loan has been delayed because states can only bring their plans for evaluation by end-May.
 

The 50-year interest-free capex loans worth Rs 1.3 trillion are part of the Centre’s FY24 capex budget of Rs 10 trillion. Of this, a significant portion will be without any constraints, while some of it will be tied to the performance of states on several parameters.
 

The interest-free loans were launched in 2021 under the Scheme for Financial Assistance to States for Capital Investment when only Rs 15,000 crore was released.
 

Last year, this was increased to Rs 1 trillion. Of which, a bulk went to Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal, Maharashtra, and Rajasthan.
 

On the question of delayed payment to the micro, small and medium enterprises (MSMEs) sector, Sitharaman said big corporates need to clear dues at the earliest, especially when the country is looking to quickly revive itself out of the pandemic era.
 

“The government’s intent is very clear. Those who have not paid MSMEs may not claim any offsets that year. The large industries should pay them for goods delivered as indicated by the contract within 45 days. Payment dues cannot stay locked up where MSMEs actually work with you,” she added.
 

The FM also exhorted the industry to come up with plans for a green energy transition.
 

“I would want the industry to be the prime mover as regards the latest frontiers in renewable energy. The industry should look into itself for potential and then come up with points for the government to facilitate, rather than ask if the government is doing anything about it,” she said.
 

Earlier in the day while speaking at the Ficci event, Revenue Secretary Sanjay Malhotra underlined growth, fiscal consolidation, and inclusivity as the three themes of the Budget.
 

“This Budget is about continuing growth and ensuring that the benefits percolate through to each and every individual. The government has tried to ensure that the benefits of growth are passed on through transfers and other means,” he added.
 

On taxation, he said, “the Budget is about partnership and building trust”. He noted that decriminalisation of certain provisions in the goods and services tax and income tax, along with schemes for presumptive taxation, will make taxpayers’ lives simple.
 

“The effort in the taxation part of the Budget is how we simplify and build a trust-based relationship and increase revenues, without increasing rates,” he observed.