Rge public sector undertakings (PSUs) in Punjab are losing much more than they are earning. The estimated losses for year 2012-13 were a whopping Rs2,122 crore compared to a relatively meagre earnings of just about Rs67 crore.
This came against the huge investment of Rs20,678.63 crore by March 31, 2013 in 52 PSUs, with power having the major share — 85.19 per cent of the total investment in 2012-13. The startling facts came to light in the Comptroller and Auditor General’s report tabled in the Punjab Vidhan Sabha on Tuesday.
State’s PSUs — comprising State Government companies and statutory corporations — are mainly concentrated in power, transport, agriculture and finance sectors.
Out of the 31 working PSUs for which the accounts were received up to September 30, 2013, 12 PSUs — including Punjab State Power Corporation limited (Rs1,639.77 crore), Punjab State Warehousing Corporation (Rs222.02 crore), Punjab State Grains Procurement Corporation limited (Rs129.72 crore), Punjab State Transmission Corporation limited (Rs56.47 crore), among others — incurred heavy loss of Rs2,121.81 crore.
On the other hand, a profit of Rs 66.53 crore was earned by 14 PSUs — including Punjab State Forest Development Corporation limited (Rs16.99 crore), Punjab Genco limited (Rs13.75 crore), Punjab State Container and Warehousing Corporation limited (Rs13.24 crore), Punjab Financial Corporation (Rs7.33 crore), among others.
Three working PSUs — Punjab Police Housing Corporation limited, Punjab Police Security Corporation limited, Punjab Municipal Infrastructure Development Company — prepared their accounts on ‘no profit no loss’ basis, while two working PSUs — Punjab Agro Power Corporation limited, and Gidderbaha Power Corporation limited — are yet to start commercial activities.
The PSUs, after reviewing the latest three-year CAG’s audit reports, incurred “controllable losses or avoidable expenditure of Rs6,290.62 crore and infructuous investments of Rs13.25 crore which were controllable with better management”.
The working PSUs bear massive losses after the 99.71 per cent of the total investment in the state PSUs was made in 31 working PSUs amounting Rs20,168.63 crore, while the remaining 0.29 per cent were made in 21 non-working PSUs — amounting Rs60 crore.
Out of total investment of Rs20,678.63 crore, Rs7838.80 crore comprised capital while Rs12,839.83 crore are long term loans. The report point out that while the capital investment has grown by 104.64 per cent from Rs3,830.56 crore in 2008-09 to Rs7,838.80 crore in 2012-13, loan investment has grown by 9.21 per cent from Rs11,756.98 crore in 2008-09 to Rs12,839.83 crore in 2012-13.
CAG stated that the thrust of PSUs investment in state was mainly in power sector. “Its percentage share in overall investments remained almost constant…it was 85.95 per cent in 2008-09, and 85.19 per cent in 2012-13”.
The report further stated that 24 working PSUs had arrears of 41 accounts as of September 30, 2013 which need to be cleared by setting targets for PSUs.
For the same, the CAG recommended that the Government may set up a Cell to oversee the clearance of arrears and set targets for individual companies. Besides, it suggested that the government or the PSUs may consider outsourcing the work relating to preparation of accounts wherever the staff is inadequate or lacks expertise.
It was also stated that out of 21 non-working PSUs, eight were under liquidation or winding up process. During 2012-13, Intramagnetics India limited was “closed under Fast Track Exit Mode of Ministry of Corporate Affairs”.
CAG opined that the non-working PSUs “are required to be closed down as their existence is not going to serve any purpose”.
As per the data given, three non-working PSUs have taken the route of winding up by Court order — which are under liquidation process for a period ranging from four to 30 years, while five are opted for voluntary winding up under Companies Act — “which is much faster and needs to be adopted or pursued vigorously”. Seven PSUs have been issued closing orders or instructions but the liquidation process has not started yet.
The report said that the government’s Directorate of Disinvestment — a cell established for disinvestment of State Government equity in state PSUs or subsidiaries and for restructuring or privatisation of these PSUs — may expedite the process of closing down of the non-working companies.