CAG Asks Maharashtra To Shut Down 22 Non-Working PSUs
State government PSUs incurred losses of nearly Rs 10,000 crore in 2015-16.
The Comptroller and Auditor General of India (CAG) has asked the Maharashtra government to shut down 22 non-working state public sector undertakings (PSUs), some of which are not operational for up to 38 years.
Another 22 PSUs posted a loss of Rs 9,832.4 crore while 36 earned a profit of Rs 3,097.8 crore, according to a report by the CAG. Which means, after registering profits consistently since 2011, the Maharashtra PSUs reported a combined loss of Rs 6,734.6 crore for the financial year 2015-2016.
The CAG pulled up the state government on the 22 non-working PSUs, which have an investment of Rs 938.9 crore. “Investments in the non-working PSUs do not contribute to the economic growth of the state,” the report said.
Since these PSUs are not contributing to the economy, nor are they meeting the desired objectives, the state should consider a total shutdown or should come up with a plan to revive them, the report said.
Of the 22 non-working PSUs, two companies – Irrigation Development Corporation of Maharashtra Ltd. and Sahyadri Glass Works Ltd. – started the process of liquidation on court orders. But they have been in liquidation for five and 22 years, respectively.
Of the PSUs that earned a profit, Maharashtra State Electricity Transmission Company Ltd. contributed the maximum (Rs 2,599.8 crore), while Maharashtra State Power Generation Company Ltd., Maharashtra State Electricity Distribution Company Ltd., and Maharashtra State Road Transport Corporation collectively reportedly heavy losses of Rs 9,595.2 crore.
The total investment in the PSUs stood at Rs 175,321 crore for the year 2015-16, an increase of 123 percent over 2011-12.
As of September 2016, 65 working PSUs clocked a turnover of Rs 91,397.6 crore, contributing 4.6 percent to the state GDP, the report said.
CAG Talks Tough
Coming down on some of the PSUs, the CAG report reprimanded the state on the declining number of tourists and inability of developing airports in the state.
The Maharashtra Airport Development Company, which is responsible to construct, operate, and maintain airports in the state, was incorporated in 2002. However, in the last 14 years since the company’s incorporation, it has not developed any airport due to absence of a comprehensive long-term plan, the report said.
The report said the Maharashtra State Road Development Corporation Ltd. did not verify the traffic data for toll collection at Kini and Tasawade on the Pune-Bangalore highway for the bid that was invited in February 2014.
Maharashtra Tourism Development Corporation Ltd, which operates 20 resorts, saw the occupancy level decline to 43 percent in 2016 as against 50 percent in 2011. This is below the all-India occupancy rate of above 60 percent. “The company needs to improve the quality of service and facilities in resorts for increasing occupancy at resorts,” the report said.