The public sector undertakings (PSUs) of Punjab incurred heavy losses during the financial year 2010-11, owing to deficiencies in financial management, planning and implementation of project among others, according to the Comptroller and Auditor General (CAG).
The working PSUs incurred an overall Rs 1,498.07 crore loss in 2010-11, and accumulated loss totalling Rs 11,921.16 crore. Out of 31 working PSUs, 11 were in loss, while 14 mustered profit, the CAG report said.
Since 2005, the state’s working PSUs had been incurring losses every year. The losses, however, decreased from Rs 3,833.99 crore in 2005-06 to Rs 1,498.07 crore in 2010-11. In 2005-06, losses aggregated to Rs 3,833.99 crore, mainly due to writing off excess rural electrification subsidy(Rs 3242 crore).
The auditor’s report states that during the year 2010-11, 14 out of the 31 working PSUs earned profit of Rs 58.30 crore, while 11 incurred loss of Rs 1556.37 crore. Three working PSUs prepared their accounts on ‘no profit no loss’ basis, two have yet to start commercial activities, while one has not prepared its first account.
The PSUs that incurred heavy losses were erstwhile Punjab State Electricity Board (Rs 1301.52 crore), Punjab State Grains Procurement Corporation Ltd (Rs 137.21 crore) and Punjab State Warehousing Corporation (Rs 84.58 crore). The major contributors to the profit were Punjab Small Industries and Export Corporation Ltd (Rs 15.94 crore), Punjab Genco Ltd (Rs 13.35 crore) and Punjab State Container and Warehousing Corporation Ltd (Rs 11.40 crore).
The report also says the losses of working PSUs were mainly attributed to deficiencies in financial management, planning, implementation of project, running their operations and monitoring.
According to the report, losses to the tune of Rs 2,267.60 crore and infrastructure investment of Rs 6.98 crore were controllable with better management.
Further, a review of three years Audit Reports (2008-09 to 2010-11) of CAG also shows that the state PSUs’ losses of Rs 4,650.77 crore and infrastructure investments of Rs 8.25 crore could have been controlled with better management. This implies a tremendous scope to improve the functioning and minimise/eliminate losses.
The CAG report suggest that the PSUs can discharge their role efficiently only if they were financially self-reliant. It also stressed the need for professionalism and accountability in the functioning of PSUs.
Further, as per the report, the state had, as on March 31, 2011, 31 working PSUs (27 companies and four statutory corporations) and 22 non-working PSUs (all companies), employing about 0.71 lakh employees. The working PSUs registered a turnover of Rs 24,431.81 crore for 2010-11 as per their latest finalised accounts. This turnover was equal to 10.68 per cent of the state gross domestic product, indicating an important role played by the state PSUs in the economy.