Odisha's investments in PSUs yield poor returns, says CAG report

The Odisha government's investments in public sector undertakings (PSUs) – government companies, cooperative societies, statutory corporations and others have drawn lacklustre returns. The rate of return on government investments has been on the wane since 2014-15.

A report on state finances for the year ended March 2018 by the Comptroller & Auditor General of India (CAG) shows the rate of return (on government investments) has drastically plunged from 30.71 per cent in 2014-15 to 1.33 per cent at the end of 2018-19. Return in the form of dividend has fallen sharply from Rs 1076.44 crore to Rs 66.22 crore in the period.

Out of 147 entities where the government poured funds, only 12 had paid dividend- two rural banks, nine government companies and one statutory corporation.

The state government had invested Rs 4794.21 crore (at the end of FY18), 54 per cent of which went into four power sector companies of which two companies paid only Rs 35.92 crore dividend. Among the 147 entities, 72 were inactive while 63 had defaulted in payments.

“The percentage of return decreased from 12.80 per cent in 2016-17 to 1.33 per cent in 2017-18. This was mainly due to non receipt of dividend from Odisha Mining Corporation (OMC) during 2017-18 as against Rs 400 crore, Rs 1,001 crore, Rs 500 crore and Rs 500 crore received during the years 2013-14 to 2016-17 respectively”, the CAG report noted.

In its reply to the central auditor, the state government said it had been pursuing with the PSUs to ensure timely payment of dividends. Bulk of the dividend was received from OMC in previous years. However, in 2017-18, pursuant to the Supreme Court orders, OMC had to submit Rs 2200 crore as compensation which was deposited in Odisha Mineral Bearing Areas Development Corporation (OMBADC). As OMC had to submit this enormous compensation, it was constrained to close 2017-18 with no profit, resulting in no dividend payment to the government.