Public Sector Undertakings (PSUs) in Punjab lost more than they earned in 2013-14. In fact, the PSUs generated a loss of whopping Rs758.92 crore against the earning of just about Rs498.42 crore. This came against the huge investment of Rs21,551.05 crore by March 31, 2014, in 52 PSUs, with power having the major share — 84.73 per cent of the total investment in 2013-14. The startling facts came to light in the latest Comptroller and Auditor General’s report on Public Sector Undertaking (Social, General and Economic Sectors).
State’s PSUs — comprising State Government companies and statutory corporations — are mainly concentrated in power, transport, agriculture and finance sectors. Out of 29 working PSUs, for which the accounts were received up to 30 September, 2014, 12 PSUs earned profit of Rs498.42 crore and 12 PSUs incurred loss of Rs758.92 crore. While the three working PSUs prepared their accounts on “no profit no loss” basis, the remaining two working PSUs are yet to start commercial activities, stated the report.
Even as the number of working PSUs has come down from 31 to 29 in a year’s time, the silver lining is reduction in losses and increase in earnings. During previous year, 12 PSUs, out of 31 working, incurred heavy loss of Rs2,121.81 crore, while a profit of Rs66.53 crore was earned by 14 PSUs. During 2013-14, neither any PSU was established nor closed down.
Heavy losses were incurred by four PSUs — Punjab State Grains Procurement Corporation limited (Rs413.86 crore), Punjab State Warehousing Corporation (Rs267.86 crore), Punjab State Industrial Development Corporation limited (Rs43.27 crore) and Pepsu Road Transport Corporation (Rs10.97 crore). On the other hand, the highest contributor in the profit includes Punjab State Power Corporation limited with earnings of Rs260.55 crore, followed by Punjab State Transmission Corporation limited with Rs158.66 crore.
Besides, Punjab Financial Corporation earned profit of Rs16.69 crore, Punjab State Forest Development Corporation limited of Rs16.99 crore, Punjab State Container and Warehousing Corporation limited of Rs13.24 crore, Punjab Small Industries and Export Corporation limited of Rs15.08 crore, and Punjab Genco limited of Rs12.07 crore.
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 condition of these PSUs was the same during previous year also.
The PSUs, after reviewing the latest three-year CAG’s audit reports, incurred “controllable losses or avoidable expenditure of Rs5929.30 crore and infructuous investments of Rs6.27 crore which were controllable with better management”. The working PSUs bear massive losses after 99.72 per cent of the total investment in the state PSUs was made in 29 working PSUs, amounting Rs21,490.95 crore, while the remaining 0.29 per cent were made in 23 non-working PSUs — amounting Rs60.10 crore. The total investment of Rs21,551.05 crore consists of Rs7,867.47 crore as capital and Rs13,683.58 crore as long term loans.
The report point out that while the capital investment has grown by 104.70 per cent from Rs3843.37 crore in 2009-10 to Rs7867.47 crore in 2013-13, loan investment has grown by 6.78 per cent from Rs12,814.83 crore in 2009-10 to Rs13,683.58 crore in 2013-14. The report stated that 26 working PSUs had arrears of 42 accounts as on 30 September 2014, 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 23 non-working PSUs, seven were under liquidation or winding up process. PCl telecom limited has been dissolved in January 2012 by the orders of the Punjab and Haryana High Court, and the remaining 15 non-working PSUs had arrears of accounts ranging from one to 23 years. CAG opined that the non-working PSUs “are required to be closed down as their existence is not going to serve any purpose”.
The reports has asked the Government to take decision regarding “winding up” of eight non-working PSUs which have become “defunct”, and 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.
CAG also pointed that the quality of accounts of the PSUs “needs improvement”. Of the 22 accounts of working companies forwarded to Audit during 2013-14, the statutory auditors had given “unqualified certificates for seven accounts, qualified certificates for 14 accounts, adverse certificate for one account”. Moreover, two accounts of Statutory corporations, finalised during October 2013 to 30 September 2014, received qualified certificates. The reports of the statutory auditors on internal control of the companies indicated several “weak” areas.