State-owned Coal India, Neyveli Lignite and Singareni Collieries will have a capex of Rs 20,121 crore in 2019-20, 15% more than the previous fiscal, according to the interim budget.
According to the Expenditure Budget, this spending would be part of internal and extra-budgetary resources (IEBR) of the central public sector undertakings.
Plan outlay of the Centre consists of two distinct parts: a part implemented directly by ministries concerned and departments; and the other through investment by state-owned entities in respect of their own plan projects and programmes. Investment by state-owned companies is financed either through budgetary support provided by the Centre, which is part of the total plan outlay and IEBR raised by state-owned companies on their own.
IEBR comprises internal resources and extra-budgetary resources. Extra-budgetary resources are the sum of domestic and foreign loans raised directly by the companies.
Broadly, the internal resources comprise retained profits — net of dividend to government, depreciation provision and carry forward of reserves and surpluses. Extra budgetary resources consist of receipts from the issue of bonds, debentures, external commercial borrowing, suppliers’ credit, deposit receipts and term loans from financial institutions.
The Expenditure Budget stipulates that Coal India would be spending Rs 10,000 crore on capex in 2019-20, against Rs 9,500 crore during the current fiscal. If achieved, this would be a 5.2% growth.
Neyveli Lignite would be investing around Rs 8,271 crore during 2019-20 against a planned capex of Rs 6922.34 crore during 2018-19. When achieved, capital expenditure would increase 19.4% during the period.
Singareni Collieries would be investing Rs 1,850 crore during 2019-20 against planned capital expenditure of Rs 1,100 crore during 2018-19. If the company manages to meet its investment targets, it would be achieving a near 68% rise in capex.
“This money for Coal India would be financed either from internal reserves or from borrowings. With internal reserves on the decline following payments of dividend and expenditure on share buyback Coal India may need to borrow funds from the market to finance its projects,” a senior Coal India executive said.
“The capex would be for opening up new mines, taking up new projects and setting up additional infrastructure facilities. For example, Coal India would be opening up a few new mines in its command area, and would be investing in setting up infrastructure as well as investment in new projects like coal bed methane and invest in railways projects as well as coal handling plants,” the executive said.
