CAG raps Maharashtra govt on PSU losses, accounts

The Union Comptroller & Auditor General (CAG) has castigated the Maharashtra government for increases in the losses incurred by its various public sector undertakings, to Rs 2,295 crore by the end of March 2010 against Rs 1,160 crore in 2004-05.

It says the losses were due to various deficiencies in financial management, planning, implementation, operations and monitoring. There are 62 working PSUs. The heaviest losses were incurred by Maharashtra State Electricity Distribution Company (Rs 1,351 crore), Maharashtra State Road Development Corporation (Rs 422 crore) and MSEB Holding Company (Rs 298 crore).

The report, tabled in the state legislature on Thursday, has emphasised a need for professionalism and accountability in the functioning of PSUs.

It has also observed that the quality of accounts of the PSUs need improvement. Of the 62 accounts of working companies finalised between October 2009 and September 2010, qualified certificates were given for 49. Nine got unqualified certificates and three got adverse ones. Additionally, there were 68 instances of non-compliance with standards in 28 accounts.

The state government had invested Rs 6,206 crore in 27 PSUs where no accounts could be had and, hence, no audit, too. So, the CAG couldn’t check whether their investments and expenditure were properly accounted. Which meant the government’s investment in such PSUs remain outside the scrutiny of the state legislature.

CAG has asked the state government to consider outsourcing the work relating to preparation of accounts wherever the staff is inadequate or lacked expertise. The government should also pursue for suitable modification and relaxation in the simplified exit scheme for closed or defunct companies, as well as extension of benefits of the scheme to non-working PSUs.