Financial Secretary Asserts Sustainability of Current Capital Expenditure Levels: Times of India

Indications of sustained public spending were made by the Finance Secretary, T V Somanathan, on Thursday. He stated that the current level of capital expenditure was “highly sustainable” and assured that the government was on track to meet its spending and fiscal deficit targets for the current fiscal year.

Although Somanathan did not provide any guidance on whether the government plans to increase the level of capital expenditure, he expressed confidence that government agencies would be able to utilize the allocated funds. The emphasis on high growth in capital expenditure has been a key focus of the Modi government’s second term, with investments in infrastructure projects expected to stimulate demand for steel and cement and encourage capacity expansion at these plants.

The Finance Secretary also highlighted the decision to keep the terms of reference of the 16th Finance Commission simple, providing the upcoming panel with flexibility in consulting states and other stakeholders to formulate its recommendations based on feedback from several states. Unlike in recent years, the basis for population consideration in the Commission’s recommendations will be left to the Constitutionally mandated body to decide.

Somanathan further noted that the Centre’s Vivad Se Vishwas scheme for MSMEs had facilitated the settlement of nearly 44,000 claims, enabling these entities to once again participate in government contracts, with around 4,000 cases yet to be decided.